Namaste Technologies

Vaporizers and Accessories

/
Volume | Market Cap | Shares | PEG Ratio | EPS

Fundamentals.

Profile:
HQ: Toronto, Canada
Founded: 2005
Facilities: UK, Toronto
Symbol: NXTTF (OTC), NV (TSXV)

Focus: Strong
Namaste operates as the largest cannabis e-commerce marketplace for vaporizers, glassware, and accessories with its websites and distribution hubs around the world. Namaste is actively pursuing growth by expanding its operations in Australia, Canada, and Europe. Namaste acquired Findify to use its AI algorithms to personalize and optimize it’s customer’s on-site buying experience.

Size: Neutral
Market Cap: US $96.8 mil
Enterprise value: $54.8 mil
# of employees: 55

Markets: Strong
Primary:  Canada, UK, Australia
Secondary:   Brazil, US, Germany, Ireland, New Zealand
Subsidiaries: Majority Subsidiaries: Namaste Technologoes Holdings, Namaste Bahamas, Namaste MD, Australian Vaporizers, CannMart, Findify, CannMart Labs
Minority interests: AF Trading and Pineapple Express Delivery

Operations: Weak
Cultivation:
Present capacity: None
Future capacity: Namaste aims to be an online platform for Cannabis brands so they do not intend to cultivate or build production plant in near term.

Distribution:
Direct sales: Through online channels.
Store networks: None to date.
Supply Agreements: Namaste is in the process of signing supply agreements with ACMPR licensed producers to expand its product offerings.

Integration/Diversification:
Vertically integrated: No
Horizontally diversified: No

Financials:  Weak
Outstanding shares (diluted): 259 mil
Revenue last year: $23.79  mil
Revenue rank in cannabis industry: 16th
EPS: ($0.16)

Management: Neutral
CEO: Meni Morim
CFO: Kenneth Ngo

Meni Moran is currently Interim CEO after its former CEO Sean Dollinger sold company assets without informing the company board about the sale. Meni Moran is now responsible for rebuilding trust while working on Namaste’s long term product strategy, product design, product development and product marketing. Namaste also hired Andrew Wilczynski, with more than 40 years of experience in corporate restructuring and takeovers.

Branding: Neutral
Namaste is focused on positioning itself as the most customer focused cannabis marketplace by using machine learning to identify buyer trends. Namaste is aiming to create communities around product categories allowing cannabis brands to interact with customer on an AMA basis. They have not executed this yet however.

Valuation: Weak
Current share price: US $0.37
Price to Sales: 9.9
52 Week Low/High: $0.28 to $3.05
EV / Revenue: 2.29
Price to Book: 1.32

Financings: Neutral
By November 30, 2018 Namaste issued 59,864,369 common shares for total gross cash proceeds of $18.3 million. Namaste also successfully closed bought deal financing in the second quarter of 2018 with gross proceeds of $40.3 million.

Risks: High
The risks of investing in any cannabis company are currently high given the newness of the market. The risks of investing in this company are higher given the low sales footprint currently and the vape crisis hurting overall industry sales.

Recommendation: Weak
Namaste is actively pursuing growth as the largest cannabis marketplace by expanding its operations in Australia, Canada and Europe. Namaste acquired Findify to use its AI algorithms to personalize and optimize their customer’s on-site buying experience.

Namaste is focused on positioning itself as the most customer focused cannabis marketplace by using machine learning to identify buyer trends. Namaste is aiming to create communities around product categories allowing cannabis brands to interact with customer on an AMA basis.

Namaste has a good chance to be a profitable company as it is currently in restructuring phase at the same time expanding in new geographical regions. Although they are currently spending more than they generate in revenue, they need a significant amount of cash to continue operations and cover expenses to survive next year.

Will its stock price improve in the long term? Less Likely

Based on the most recent annual filings, Namaste’s price to sales (P/S) is 9.99 which is quite risky, however, if you have the higher-risk appetite you can consider holding this stock till the P/S ratio reach below 6.

In 2018, Namaste increased in its revenue by 118%, which was mainly due to its growth in key markets while strengthening its market share. Meanwhile, Namaste’s Cash to Debt ratio decreased to 10.59% in 2018 which shows that it sufficient cash balance to cover its operations next year.

The selling, general, and administration expenses was the key driver which caused significant loss to the company as these expenses increased 377% due major increase in Share-based compensation, advertising and promotion expenses and depreciation charges. Controlling these expenses will be key factor for the survival of company.

For these reasons, we think Namaste, at or near its current price of $0.37 a share, can be a risky investment opportunity—though as earnings improve and expenses reduced then an opportunity can appear.

READ NAMASTE TECHNOLOGY (NXTTF) NEWS

Get the Q2, ’19 Cannin Hemp Report ($99)

Includes the latest market & industry update, 12 technical fundamental analyses, latest regulations by state, new medical research and more!

LEARN MORE

Technical Analysis of Namaste Technologies Inc (NXTTF)