Nextleaf Solutions OILFF Stock Forecast & Analysis

Nextleaf Solutions OILFF stock is both a B2B and B2C.  Originally, Nextleaf Solutions started as a services company to other businesses with its extraction for vape & oil.  Now, they have the licensing distribution for a legacy cannabis product that they are distributing in Canada.  Nextleaf Solutions has an extraction process that maximizes extraction while minimizing waste.  And, in what will become a hyper-competitive industry in the future, this could be very profitable.  Now, Nextleaf Solutions has an award-winning product for B2C with Glacial Gold, a label that has been around since 2015; prior to the removal of prohibition.

I am keen on the extraction process.  I believe these additions will be beneficial for companies in the future as they try to maximize their respective opportunity.  If a company can maximize its extraction that will add to the bottom line.

As with Glacial Gold, the B2C product line in its mix, Nextleaf Solutions has added needed revenue.  Now, they need to scale up in order to achieve its goals of EBITDA profitability.  And then, net earnings profitability would be near.  Vapes are popular and this may be a product line that drvies revenues.

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Nextleaf Solutions Financial Statements

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Here is the analysis for Nextleaf Solutions from the Nextleaf Solutions Financial Statements

Nextleaf Solutions Gross Profits

  • Nextleaf Solutions Revenue

While there have been increases in revenues, there needs to be more in order to scale up to profitability.  Revenues hit nearly $1M for the quarter while gross margins are printing some 33%.  This is a start and if revenues can increase in the future hitting profitability may not be far off.

When it comes to increasing revenues, with additional units of production, there are outsized profit margins after certain milestones are achieved.  This is what I will be focusing on with future revenue growth is the ability to increase gross margins.

Nextleaf Solutions Operating Profits

  • Nextleaf Solutions Operating Costs

As with gross margins, operating profits near a positive level are not far off.  First, of course, any increases in revenues should add to gross profits if gross margins also simultaneously increase.  Then, if operating costs can remain modestly static and simultaneously there are increases in revenues, operating efficiencies will improve.

For now, operating efficiencies are not too far off of the mark of 30% – 35%.  With ~65% operating efficiencies, it would not take too much of an increase to see a competitive level of operating efficiencies.  This will also likely amount to operating profitability.

Nextleaf Solutions EBITDA & Net Profits

  • Nextleaf Solutions EBITDA

EBITDA profitability is not far off.  This is the math between marginal profits with increasing revenue, and how close Nextleaf Solutions is to profits.  Whenever a company starts to produce & sell product, this is the milestone they are always striving to achieve next.

Nextleaf Solutions Cash On Hand

  • Nextleaf Solutions Cash On Hand

Cash burn rate is usually stated in monthly terms.  The latest quarter has Nextleaf Solutions burning about $200K monthly.  There is plenty of cash on hand to maintain that.  At the same time, Nextleaf Solutions also has a solid cash-to-debt ratio.  But, more cash will ultimately be needed and I expect that Nextleaf Solutions will need to do some financing.

Nextleaf Solutions Total Equity

  • Nextleaf Solutions Total Assets

When you are analyzing a company, especially one that is still in the earlier process of building up its business, you want to see increasing total equity.  Total equity is, of course, the difference of total assets less total liabilities; this is also shareholder equity or, book value.  Total assets and equity are what are going to give a company and management the ability to create revenue and profits.

Mostly, total equity has been on a slow decline as asset growth has slowed relative to liabilities which have been heading higher.  But, the past quarter saw a move higher.  Potential investors are going to want to continually look toward this as the capability of a company to increase its revenues – and, by extension, profits.

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Nextleaf Solutions OILFF Stock Forecast

In order for me to do a solid analysis and the OILFF stock forecast, Nextleaf Solutions will need to achieve EBITDA profitability.  And, while they scale up their revenue, they will get there.  But, the OILFF stock forecast is going to wait.

Is Nextleaf Solutions OILFF Stock A Good Investment?

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Nextleaf Solutions is on its way to building up a business with its Glacial Gold product line.  Vapes are popular.  And a company that exclusively focuses on both vapes & oils may have an interesting niche. At the same time, I look toward companies being strong candidates for acquisition by larger companies.  With the extraction line of product, this could be an interesting addition to a major player should yields be significantly higher production levels.  And, if anyone player does not have vapes or oils, this fills another category.

This is what makes Nextleaf Solutions a compelling opportunity.  Obviously, if they can achieve scaled revenue growth with profitability in the near-term future, and do so without being acquired, this will be a major bonus.  I don’t see Nextleaf Solutions being too far off from getting to this level.  I am interested in seeing what revenue growth will look like in the upcoming year.

Company Financial Data

Nextleaf Solutions OILFF Stock Financial Data

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3 thoughts on “Nextleaf Solutions OILFF Stock Forecast & Analysis

  1. Thanks for the review on Nextleaf, they have been on my watchlist now for a while. 👍
    As far as investing in any shares, I am going to hold off my position until I can see some more profitability out of OILFF.

    1. @mattpaul02yahoo-com 

      Gonna have to agree with holding off.  These guys will put the pieces together over a longer period of time.  In the meantime, you can maximize your opportunity by looking at some other potential picks.  Try looking at my top picks and finding the companies that are already profitable, overlooked, and undervalued.  Maybe Vext?  

  2. Thanks for the tip, its funny these guys have been on my radar for quite a while now and i think i am going to make a move on Vext Science, Inc. These guys are sitting at a current BUY w/ a target price of a 1.32..

    1st of all the stock is trading at or around 70.2% below its fair value in my opinion . What caught my eye is the company and there revenue is forecasted to grow 18.25% per year. Plus, there earnings grew by 2924.3% over the past year which is pretty massive..

    Negatives that i SEE are there earnings have declined by 4.2% per year over past 5 years.
    VEXT – has a high level of non-cash earnings but I still still see a ton of value in this cannabis stock..

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