Organigram OGI Stock Forecast & Analysis

Organigram OGI stock released financial earnings and I wanted to look at what is going on with the data and start to do the OGI Stock Forecast.  Organigram printed very solid numbers and this is important considering that Organigram – OGI stock is a Nasdaq-listed stock.  This means revenues will be accelerating, margins will be improving, and profits are advancing.  All good.  The importance of this is that OrganiGram, OGI Stock, is NASDAQ-traded and widely held.  OGI stock, like many other cannabis stocks, are starting to really accelerate in their moves upwards; here’s to hoping this is a solid trend.  If OGI stock continues higher, this will draw in the necessary attention to create the buzz to attract more investors into the industry.  That, in turn, will provide a feedback loop of even more investors playing catch-up and pushing the market even higher.  Again: All good!

Keep in mind, achieving EBTIDA profitability is a major step for a newer company.  This means the core costs are being covered.  From there, if a company continues to scale up, marginal profits, those profits after the initial units moving through production & distribution, have larger margins.  The big costs will have been paid for already.  Next, the additional units will add outsized profits to the company’s bottom line.  In the case of such a higher-visibility stock such as OrganiGram Holdings, OGI stock, this is a significant move for the entire industry.

As it is, there are other factors that may be moving the markets, that being Cannabis Federal Legalization and the discovery that Cannabis Prevents & Cures COVID.  With continued profit increases from the highest-profile cannabis companies as well as significant positive developments elsewhere, it is no wonder we are seeing such an about-face turn-around with undervalued marijuana stocks.

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OrganiGram Financial Data

Here is a breakdown of OrganiGram financial data.  For a full breakdown of OrganiGram OGI stock numbers.

OrganiGram Gross Profits

  • Organigram Cost of Goods

Revenues backed off of the all-time highs.  However, margins improved on lower revenues and this is largely the story across the board.  With the scaling up of operations and cleaning up costs, this pushed gross margins upward and gross profits improved.  This will be what to look at moving forward.

While gross margins were improved, they are not the best in the industry.  This means that with more scaling up, Organigram has the ability to improve its bottom line even more as they move forward.

And, with the profitability Organigram is now printing, this will improve net earnings even more likely driving OGI Stock higher.

OrganiGram Operating Profits

  • Organigram Operating Costs

Operating efficiencies are close to wheelhouse numbers.  The important thing to look at is that as OrganiGram worked over the past periods, they achieved better and better results, getting themselves to a point where they learned to be profitable doing their thing of growing, processing, and selling cannabis.  Because of this, that culture of knowledge will propel them forward with better and better numbers.

At the same time, although there will be advances in revenues from the sales of cannabis products, operating costs are likely to remain contained.  Operating costs are Sales, General, & Administrative (SG&A).  Sales may continue higher, but at a relatively slower pace than revenue growth.  Administrative is very likely to remain contained.  Given this, advances in revenues will likely see a decline in the operating efficiency numbers; an improvement.

OrganiGram EBTIDA & Net Profits

  • Organigram EBITDA

Net earnings were positive.  That is huge and this is what I am mostly focusing on.  The increases were big for Organigram with the swing to profitability.  Mainly, however, I am looking at the short sellers getting squeezed out as OGI Stock moves higher and other cannabis stocks move upward as well.

OrganiGram Cash On Hand

  • Organigram Cash on Hand

OrganiGram is positioned to be close to the top with cash on hand versus debt. They have ample cash and little debt.  The only crux that OrganiGram really has is the cash burn, which at this point is minimal.

Also, there is always the potential for OrganiGram to turn to their strategic partners, British American Tobacco, and raise any funds via debt or stock, to allow for expansive opportunities.  Being in such a strong position with a big, and experienced player in the background is something that will likely accelerate OrganiGram over the years.

OrganiGram Total Equity

  • Organigram Total Assets

As I mentioned, there is little debt to speak of when you look at the numbers.  Total equity is the engine that drives future revenues.  Equity is driven by assets, which a company needs in order to build a company.

But, OrganiGram’s total equity is flat-ish.  I’d want to see a chart here that is pushing upwards far more; I have plenty of other charts from other companies doing just that.

OrganiGram OGI Stock Forecast

OrganiGram OGI Stock DCF

I broke down the Organigram OGI stock updates but, along with many other cannabis stocks, I am having to ratchet down the intrinsic value simply because interest rates are pushing these variables lower.  But, keep in mind that since OGI stock is a Nasdaq-listed cannabis stock this will likely move higher in a very big move upward.

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Is OrganiGram OGI Stock A Good Investment?

Organigram OGI Stock

The increase in revenue and the improvements in margins are a key factors for me.  Gross margins shot up along with revenues, and operating costs also improved.  The relative move lower in operating costs was such key factor and, I want to see if this is something that will maintain going forward.

It looks like the bumps are behind Organigram.  Being that OGI stock is a Canadian cannabis stock, and that OGI stock trades on the Nasdaq, this will be important for OGI and cannabis stocks in general.  My thinking is that the bottom is in place for OGI stock. And, if OGI can continually grow its revenue, continually improve its margins, this will be a key moment to buy into OGI stock.  And, if cannabis federal legalization occurs soon, OGI stock will very likely shoot upward.  I like what I see here.

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