A 395% increase in revenue complimented by expanding gross margins could explain why Canbiola Inc (OTCMKTS: CANB) has started bottoming out, after coming under pressure in recent months. The company completing strategic investments, acquisitions and product launch also continue to strengthen market sentiments.
Canbiola Price Analysis
Price action activity has started picking up some steam after a steep plunge in the first quarter of the year. An impressive earnings report is not the only catalyst strengthening the stock is upside action. The acquisition of Seven Chakras leaves the company well positioned to come up with new products to take advantage of the soaring demand.
The company has also made available its Sustained Acoustic Medicine units at select medical professional offices. The products expand the company’s portfolio into the treatment of chronic pain as well as tissue healing.
Formation of a double bottom could as well signal that short sellers are slowly exiting their position. The upside action has gained pace in recent weeks. A rally followed by a close above the $0.05 resistance level has opened the door for the stock to make a run for the $0.08 mark, which happens to be the next substantial resistance level.
Conversely, pullbacks face strong support at the $0.04 support level below which the stock could drop further back to 52-week lows.
What Does Canbiola Do?
Canbiola is engaged in the development and commercialization of cannabis-based products for pain insomnia, epilepsy and anxiety management. The company’s product line is made up of CBD products derived from hemp including oils, creams, moisturizers, chews vapes and gel caps.
Revenue Growth Milestone
An impressive Q4 and full-year earnings report is the latest catalyst fuelling Canbiola upside action. During the year, the company achieved significant milestones that set the stage for yet another record-breaking year, both on operational efficiency as well as revenue generation.
Revenues in Q4 increased by 395% to $281,315 as gross margins increased to 46%. However operating loss ballooned to $2.6 million. Full year revenues increased 445% to 668,603 attributed to an increase in gross sales as gross margin expanded to 50%.
According to the Chief Executive Officer, Marco Alfonsi 2018 was a set-up year epitomized by the expansion of production capabilities as well as the launch of a new line of CBD products.
“We now have our line of proprietary CBD products in the hands of over 300 medical offices and health professionals and successfully launched our revolutionary Sustained Acoustic Medicine wellness solution. We continue to explore additional and unique ways to bring our products to market and believe we are well-positioned for accretive revenue growth in 2019,” explained Mr. Alfonsi.
In addition, Canbiola completed the acquisition of Pure Health Products further strengthening its portfolio of cannabis products. The company also launched Pure Lead Oil further strengthening its product line.
Expanding CBD product Line
The company has wholly owned subsidiary Pure Health Products has since completed the acquisition of Seven Chakras LLC. With the acquisition, Canbiola gains access to proprietary formulas as well as methods and trade secrets associated with the manufacturing of CBD infused Seven Chakras products.
“We believe this agreement will further strengthen and enhance Carniola’s brand, distribution, and footprint by integrating this CBD product portfolio with our current products and work towards our mission to be the premier provider of the highest quality Hemp natural products on the market,” said Mr. Alfonsi.
Canbiola wellness solution Sustained Acoustic Medicine has also been made available at select medical professional offices, expected to strengthen the company’s revenue base further. The solution is proven in accelerating tissue healing and chronic pain reduction.
After taking a significant hit in the first quarter, Carniola’s upside action has started picking up some steam as investors react to an impressive earnings report. The stock has reached a bottom given the formation of a double bottom that signals bulls are slowly streaming in.
Canbiola share price gains coincide with an uptick in market sentiments that underscore strengthening investor confidence. The stock holding above the $0.05 mark is the first sign of strength that supports further upside action.
As it stands, Canbiola remains well supported to continue rising given the improved market sentiments and fundamentals.
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Disclosure: We have no position in CANB and have not been compensated for this article.