OrganiGram Holdings slid as much as 10% in pre-market trading on Tuesday after the company posted lower second quarter revenue than expected by analysts.
OrganiGram Holdings’ (OGI) revenue was C$14.6 million in 2Q 2021, down from C$23.2 million in the same quarter a year earlier. It missed analysts’ estimates of C$19.1 million.
The Canadian cannabis company posted a net loss of C$66.4 million in the quarter ended February 28, much wider than the loss of C$6.8 million posted in 2Q 2020.
Organigram CEO Greg Engel said, “Although Q2 2021 results were challenged by industry dynamics, COVID-19 and staffing limitations at our facility, we believe there are excellent prospects ahead for the industry, Organigram and our shareholders.”
“Nearer term, we are currently tracking to generate higher revenue in Q3 2021 as our new product portfolio continues to gain traction and we become better staffed to fulfill demand,” Engel added.
OrganiGram currently has C$232 million in cash and short-term investments. Last week, the cannabis company acquired The Edibles & Infusions Corp. This acquisition positions OrganiGram to generate revenue from edibles, a fast-growing market. (See OrganiGram stock analysis on TipRanks)
Last week, BMO Capital analyst Tamy Chen upgraded the stock to Hold from Sell with an unchanged C$4.00 price target (14% upside potential). She is positive about OrganiGram’s strategic collaboration with British American Tobacco (BTI).
Overall, OrganiGram stock has a Moderate Buy consensus rating, based on 2 Buys and 6 Holds. The average analyst price target of C$4.72 implies an upside potential of about 34% to current levels. Shares have plunged almost 40% over the past month.