Amyris: Will this Hemp Stock Continue to Surge in 2021?
Following the recent US election, many investors are trying to set their foot into the growing marijuana industry. However, there’s still a lot of uncertainty in the space. If you don’t want to look at a pure-play marijuana stock, there are other options available to you. Based in California, Amyris Inc. (NYSE: AMRS) is a biotechnology corporation that produces high-quality health & wellness, beauty, and similar other consumer products. It uses cannabinoids in some of its products. Amyris stock has been volatile for years but has grown 3x since December 2020. But will this hemp stock continue to surge in 2021?
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Amyris: Innovation & Success
Amyris is trying to build a portfolio of offerings by launching new and innovative products over the years. Currently, it is into developing molecules that apart from being used in their line of products shall also hold a host of potential medical benefits. There are talks to use one of these molecules in the preparation of billions of doses of vaccines for flus including the COVID-19 as well.
The company also garnered a lot of media attention when its sugarcane derived sweetener “Purecane” was awarded the 2020 Popular Science “Best of What’s New Award” in the engineering category. The product was recognized amongst the 100 greatest innovations of 2020. What makes it unique is the fact that despite being a naturally-derived sweetener it tastes really good and does not produce a bitter aftertaste like most other sweeteners available in the market.
Purecane allows its users to pamper their sweet tooth without experiencing the ill effects of sugar. Such recognition usually gives a big boost to the brand value. But will it be enough to sustain Amyris’ recent stock surge?
Notable Growth Strategies
Amyris has been working really hard on expanding its operations by launching multiple unique products periodically and by collaborating with several industry majors. On top of that, the ongoing political and social environment is also favoring its growth.
The management stated in the recent virtual meet that Amyris already had three ongoing deals for which the company was expecting net revenues of $450 million. Out of those the one with DSM Nutritional Products for the licensed supply of Farnese to Givaudan has already been closed last month at $50 million. Amyris and DSM have been collaborating successfully since 2017 and it is hopeful this collaboration will be successful.
Earlier this September it successfully started the mass commercial production of an industrially fermented alternative of the cannabidiol (CBD) called cannabigerol (CBG). CBG is said to deliver better efficacy than CBD and therefore has the potential of being a revolutionary product.
The decision to partner with Rosie Huntington-Whiteley and Jonathan Van Ness to expand the clean beauty and hair care product range is another excellent idea. As the collaborative products start rolling out by 2021 Amyris might see a huge spurt in the revenues.
Another brilliant development was venturing into the Chinese Market via a long term agreement with Xinfu of China.
Improved Financial Results
Amyris had a 58% surge in its revenues compared to its previous quarter, and on a Y/Y basis, its consumer segment had witnessed a massive 203% rise while the ingredients segment rose by 21%. The company was also able to manage its expenses better for which the cash operating expenses improved by 10%.
The reduction in debt by 41% and improved interest rates also led to a 61% reduction in interest costs. Consequently, the EBITDA increased by $10 million on a Y/Y basis owing to the increased demand for its innovative products and better expense management tactics with a significant rise in the EPS. But does this make Amyris one of the best penny pot stocks for 2021?
Bottom Line: Will this Hemp Stock Continue to Surge in 2021?
It doesn’t seem like Amyris is going to slow down in the coming days. The aggressive growth strategy that it is pursuing might seem risky but it also highlights the high risk, high reward potential that the stock offers. However, we do remain cautious on Amyris as it’s currently trading above target but still believe in the long term viability of the company.
Amyris: Will this Hemp Stock Continue to Surge in 2021?
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