CannTrust Stock: Financial Report Sends CTST Stock Soaring

CannTrust Stock: Financial Report Sends CTST Soaring
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CannTrust Stock Financial Report

The last time we checked in on CannTrust Holdings Inc (NYSE:CTST), the company’s quarterly report had just been released and was, overall, a little disappointing. But this quarter the company is singing a much different tune.

With the marijuana industry in general rallying today, CTST stock has jumped significantly due to the combination of strong numbers and positive investor sentiment on marijuana as a whole.

So let’s take a look at some of the highlights of the CannTrust Q1 2019 report.

CannTrust recorded quarterly revenue of CA$16.9 million, a 115% increase compared to the first quarter of 2018. Some 33% of the company’s revenue was generated through its recreational channel and 67% through its medical channel. (Source: “CannTrust Reports Financial Results for Q1 2019,” Cision, May 14, 2019.)

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The company also increased its total active patient count to 68,000 as of March 31, a 70% increase compared to the same period last year.

Harvested production increased by more than 400% (over 20,000 pounds) versus the first quarter of 2018—and by 96% versus the fourth quarter of 2018—to over 9,400 kilograms.

CannTrust also sold over 3,000 kilograms (6,600 pounds) of dried cannabis equivalent, a nearly 200% increase compared to the prior year.

Average net price per gram was CA$5.47. Meanwhile, cost of sales per gram sold and cash cost per gram sold were CA$3.03 and CA$2.77, respectively, compared to CA$3.08 and CA$2.94 in the previous quarter.

Overall, these numbers were heartening for CTST stock supporters, and that is reflected in the stock’s impressive jump in share price.

You may remember that, when CannTrust last missed its report targets, its stock predictably took a plunge.

But the bad showing is now behind it and the company has recovered nicely with its Q1 2019 report. Does that mean CannTrust stock is worth jumping in on for the long haul?

CTST Stock Prediction

While CannTrust stock’s turnaround is impressive, and strong financials are the bedrock of any pot stock looking to make sustainable, long-term gains, I’d keep CannTrust at arm’s length for now.

For the reason why, look at the stock’s recent performance in the chart below:

Chart courtesy of StockCharts.com

This stock has been on a downward trend for the past month, and while the strong Q1 financial report is going to help even things out, it’s likely not enough to force a total turnaround in share prices.

CTST stock does have promise, however.

In fact, among pot stocks, I’d say it has a very high potential. But it is a marijuana penny stock that has fewer fundamentally impressive attributes compared to, say, companies like OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI) and Hexo Corp (NYSEAMERICAN:HEXO).

While CannTrust stock could double its value within the next 12 months (and I’d even say this is more likely to happen than not), other stocks are simply more stable and offer better returns at the moment. That could all change, but I’d keep my focus on the other two marijuana penny stocks mentioned above.

Analyst Take

The CannTrust Q1 2019 report is impressive, filled with strong numbers pushing CTST stock’s value up by nearly double digits in early-morning trading today. But the company still has a ways to go before it earns my trust.

Its previous quarterly report had the exact opposite effect, after all. My advice: let the company string together a number of strong quarterly reports and other victories before going full steam ahead with CannTrust stock.