MPX International MPXOF stock is one of those companies that is plodding away but, without gaining a tremendous amount of press along the way. MPX International is in multiple countries and has multiple dispensaries. But, they have yet to achieve economies of scale that would get them to the point where I could do the MPXOF stock forecast. Still, this is one of the cannabis stocks you would want to keep an eye on. If MPX International can scale up revenues to their stated objective run-rate of $100M, this could turn into a profitable company. As far as cannabis stocks and cannabis investments go, I will continue to follow MPX International.
Despite the future potential of MPX International with its run-rate, there are concerns. Gross margins are negative and operating efficiencies are above 100%. Plus, total equity is declining along with cash on hand. And, there is a cash-burn rate that would preclude success at the current pace. Given that, can MPX International scale up?
An International Company
Without realizing it, MPX International has a very wide swath of reach for its products. They claim to have an annual run-rate of $100M. I am not certain how that adds up. But, if they were to achieve this goal, this would be a large-scale company with a global footprint that may be a target for some US MSO companies looking to expand out of the US. Given some of the areas MPX International is in, this could be an attractive acquisition target.
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MPX International Financial Data
MPX International Gross Profits
On the MPX International company website you will see it states there is a $100M run-rate. But, if you look at revenues here you can only add up to single-digit revenue. I have not been able to quantify when that $100M run rate happens. But, the process of me starting to watch these companies allows me to keep an eye on each of these companies and see if there is progress toward these goals. Should MPX International achieve this stated goal, things could get interesting.
For now, gross margins are negative. MPX International will need to scale up revenue to get to the point where positive and competitive gross margins are hit.
MPX International Operating Profits
To the plus side, operating costs are relatively flat for now. Should a non-linear increase in revenue allow MPX International to keep operating costs at bay, it may be that getting operating efficiencies at competitive levels an easy task.
MPX International EBITDA & Net Profits
Both EBITDA & net earnings are negative. This means there is a cash burn rate, and if you look below at MPX International’s cash situation, this is not the most solid foundation either. As I mentioned above, if operating costs can remain constant, it is possible that operating efficiencies may push to competitive levels with increased revenues. This will go far to accomplishing what needs to be done.
But, it is a long way away for net earnings profitability. However, and this is something that I still have no idea what it means, MPX International states on its website it has a $100M run rate. To me, a run rate is something you are actually doing and, that it is in a specified period of time. It seems to me that MPX International is capable of the $100M and they may be able to achieve that over perhaps 5 years’ time. That is not something clarified on the website at this time.
MPX International Cash On Hand
Cash on hand and equity go hand in hand, as far as I am concerned. With a newish company still trying to achieve a level of EBITDA and scale that will move the company forward, cash is king; especially with newer cannabis stocks. Here, MPX is seeing its cash position deteriorate. And, total liabilities are climbing.
MPX International Total Equity
For the past few quarters, liabilities have been increasing and assets – along with cash – have been decreasing. This is one of the places that I look toward to see if management is creating value for its investors. With an increasing total equity stake, management can use these assets to create revenues and drive profits.
But, in the case of MPX International, with the decline in total equity as well as a cash-burn rate, and the inability to scale up revenues to achieve economies of scale, this is a company that has a ways to go. This is not to say that MPX International cannot get to these levels. But, it is a slightly uphill battle.
MPX International MPXOF Stock Forecast
As I usually do, I will wait to do the MPXOF stock forecast until MPX International achieves EBITDA profitability. There are a few milestones yet to achieve but, I believe that with continued growth they can get there.
Is MPX International MPXOF Stock A Good Investment?
MPX International is kind of a surprising company to me that they are so diverse throughout the world. But, it may be that not achieve scale in revenue and profits prior to getting their footprint around the globe may be a move that will exhaust them of cash. But, I manage my own budget very frugally, and maybe I will that upon the companies I look toward investing in.
I am going to keep my eye on MPX International and see if they can start increasing revenues and what the company does about its ongoing cash position. If there is a turn of events, this may drive me to want to take a deeper look and maybe a chance.
I think the international aspects are the most appealing part of MPX International. But, they have some work to do.
Company Financial Data
MPX International MPXOF Stock Financial Statements
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