Organigram (OGI) Stock Down on Lowered Guidance, is it a Buying Opportunity?  

Share This Article
November 14, 2019 12:15pm ETF BASIC NEWS

ETF BASIC NEWS | News, Ratings, and Charts

On Monday, Organigram Holdings Inc. (OGI) lowered its revenue guidance for fiscal Q4 net revenues, further pushing the stock lower and leaving many to wonder: Has it finally hit bottom?

OGI pulled in CA$24.8 million during its fiscal Q3, but now has lowered its fiscal Q4 expectations to CA$16.3 million.

For the full fiscal year 2019, the company projects a positive adjusted EBITDA and a net revenue of CA$80.4 million ($60.7 million), a year-over-year growth in net revenue of about 547%.

According to a FactSet poll, analysts were anticipating a Q4 revenue closer to C$27.9 million.

Organigram points to a shortage of Canadian retail outlets as part of the culprit, as the rollout of Canadian retail outlets has been bottlenecked by regulation.

Projected Q4 revenue is based on CA$20 million in quarterly shipments and approximately CA$3.7 million in provisions for product returns and pricing adjustments, according to the company.

The company also said that nearly CA$1.6 million in packaging and inventory adjustments and lower fourth-quarter net revenue may yield a negative adjusted EBITDA for the quarter. It expects to have ~$47.9 million in cash and equivalents by the end of the quarter.

“While Q4 2019 did not meet our overall expectations, we have not only emerged as one of the national leaders in the industry with significant growth expected in net revenue and strong market share, we expect to report positive adjusted EBITDA for the year,” said CEO Greg Engel.

“And we remain relentlessly focused on running a profitable business which earns attractive returns on investment for our shareholders over the near and long term. We are encouraged by Ontario’s recent announcement to expand the retail network and believe this should be an important catalyst to drive further growth for us and the industry as a whole.”

Organigram expands its offerings

In the Q4 2019 earnings release, Organigram is expected to report an improvement in its per-gram cultivation cost and in the total volume harvested. The company’s yield per plant returned to normalized levels following a temporary decline in fiscal Q3 2019.

As mentioned in the company’s Q3 earnings report, the cannabinoid content in Organigram’s harvested flower and sweet leaf continue to reach all-time highs. OGI strives for an optimal balance of high yields and high cannabinoid content.

By fiscal Q1 2020, Organigram plans to launch vape pens in mid-December. The company intends on following up with cannabis-infused chocolate products during calendar Q1 2020. Next on the horizon for fiscal 2020 is a shelf-stable, water-compatible, flavorless nano-emulsion powdered beverage product — pending licensing for the production area and equipment delivery and commissioning schedules.

OGI also obtained its research and development license from Health Canada last month to conduct additional in-house research (including taste testing), in an effort to achieve the optimal consumer experience.

Organigram submitted new product notifications to Health Canada for a vape pen portfolio and cannabis infused chocolates last month.

Organigram Holdings Inc. is expected to report fiscal Q4 earnings Nov. 25, 2019.

OrganiGram Holdings Inc. (OGI) was trading at $2.40 per share on Thursday morning, down $0.11 (-4.38%). Year-to-date, OGI has declined N/A%, versus a 16.05% rise in the benchmark S&P 500 index during the same period.

About the Author: Eric Bowler

eric-bowlerEric Bowler is an accomplished journalist providing in-depth insights for more than two decades. Over the past several years his focus has been on the marijuana industry, with a special interest in cannabis growth stocks. His daily coverage of the industry keeps him on top of the key trends with the goal of helping investors make well-informed decisions.

7 "SAFE HAVEN" Dividend Stocks for Turbulent Times

Read Next

Free Investing Ideas Newsletter!

Join over 70,000 investors who get the latest insights and top rated picks from our free investment newsletter.

Most Popular

7 Best ETFs for the NEXT Bull Market

Explore More from

Free Investment Newsletter

Join over 70,000 investors who get the latest insights and top rated picks from our free investment newsletter. respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories