Six Undervalued Micro Cap Stocks To Consider

At Singular Research, we focus on small to micro cap companies that lack analyst coverage and have a compelling investment story.  It is only a matter of time before these companies are discovered leading to broader Institutional coverage and potentially dynamic returns.  We want you to be invested in these companies before the stock market and other analysts realize their true potential. Over the last 12 years, our coverage has outperformed our competition and the Russell 2000 by a wide and consistent margin.  Please see here for our historical performance.  

EVIO Labs Inc. (EVIO)

Recommendation: Buy

12-month Price Target: $2.00

Price as of 5/17/18: $1.30

Upside: 54%

EVIO Inc. is a leading provider of quality control testing, consulting and advisory services to the cannabis industry. The company owns 9 laboratories serving five states in the U.S. – California, Colorado, Massachusetts, Oregon and Florida.  

Investment Thesis & Financial Highlights (Q1:18)

  • Cannabis testing is one of the fastest growing subsets in the rapidly growing market of legal medical and recreational marijuana.

  • With mandatory testing of cannabis products gaining traction, we expect EVIO to be a significant beneficiary given its wide experience (~50,000 tests conducted so far) and accredited laboratories.

  • We believe EVIO is positioned to benefit as more states look to legalize cannabis and mandate testing of products from accredited laboratories.

  • EVIO is set to expand its footprint and double the number of laboratories to 18 in 2018.

  • The company is also investing in expanded testing service offerings, equipment upgrades and new testing capabilities within existing laboratories which should result in increased revenues and higher operating efficiencies.

  • California, the largest single market for cannabis sales, introduced stringent mandatory testing rules which are set to become effective July 1, 2018.  EVIO has three labs in California and is looking to expand.

  • Revenues rose 348% and 438% in 2016 and 2017, respectively. In the first quarter of 2018, revenues advanced 41.6% (yoy).

  • Total gross profit was $33,906 and $564,507 for 2016 and 2017, respectively. The gross margins for those periods were 6.0% and 19.0% for 2016 and 2017, respectively.

  • For the first quarter of FY:18 gross profit was $210,602 vs. $78,377 (yoy), while gross margin for the period increased significantly (22.0% vs. 12.0%).

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