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Friday, May 20, 2022

Buying Neptune Wellness Solutions Inc. (NEPT) Stock is a Riskier Move or not.

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Neptune Wellness Solutions Inc. (NEPT) is a diverse health and wellness brand redefining the concept of health and wellness for its customers by producing affordable consumer products. The company is ranked in 24th position among its 27 peers. The revenue of the personal care industry will probably reach $238 billion during 2022 and will show a 2022-2025 CAGR of 10.60%, consequently its expected market volume will reach $322 billion by 2025.

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NEPT: Recent Developments

The company reported the unveiling of Mood Ring’s new product line on April 19, featuring cannabis flavor-forward strains accessible across Ontario in various formats. The product line featured environmental-friendly characteristics including biodegradable hemp plastic and compostable packing. The company’s product line unveiling in April includes

  • Craft Slurface Whole Flower
  • Craft Golden Berry Pre-Rolls
  • Florida Citrus Kush Vape Cartridge

NEPT: Earnings

NEPT recorded a remarkable gain (58.2%) in its 2021 full-year revenue along with a drastic decline (103.7%) in its earnings per share for the same period. Its revenue for FY21 was reported to be $46.8 million and the EPS was -$1.38. For the fiscal year ending March 2022, the company expects revenue of $50.7 million and EPS of -$0.32.

Comparison with Peers

When the three-year performance of NEPT is compared with its peers including ZIVO, LFVN, CVSI, GHSI, and NBEV, it becomes obvious that ZIVO outperformed during the period, while GHSI and CVSI were the lowest performers.

Insider Transactions and Analyst Ratings

A total of 169 million outstanding shares of the company are reported, of which the insiders possess up to 5.4% of the shares, and the greater number of the shares (11.8%) are owned by institutional investors. Cowen & Co. analyst firm initiated the coverage on the company and rated it as market performance not changing its targeted price.

Risk Factors

NEPT has a smaller amount of cash runway for one year, which poses a serious threat to the incumbent investors. Also, no signs of profitability over the next three years, no meaningful market capitalization, and dilution of shareholders are some of the risky factors.

Bottom Line

The company’s revenue growth projection per year of NEPT is 57%, with the earnings to grow by 72% in the next three years. This will prove to be a solid step toward attracting investors.

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