On May 27, good natured Products (GDNP) announced its first-quarter financial results. The earth-friendly company offers a wide assortment of options made from plants instead of petroleum.
The company experienced strong revenue growth in the quarter thanks to its recent acquisition of Ex-Tech Plastics Inc.
Indeed, Q1 2021 revenue came in at C$7.9 million, an increase of 159% from revenues of C$3.1 million reported in Q1 2020.
Gross profit for the quarter ended March 31 grew 154.5% to C$2.8 million. Gross profit as a percentage of sales increased to 35.3%, compared to 36.3% a year ago.
The company swung to a positive adjusted EBITDA of C$155,000 in the first quarter of 2021. In the prior-year quarter, GDNP posted an adjusted EBITDA loss of C$308,000. However, net loss increased 137.5% to C$1.9 million year-on-year.
good natured Products’ CEO Paul Antoniadis said, "This highly strategic and accretive acquisition of Ex-Tech Plastics Inc. positions good natured® for further strong revenue growth and improved profitability. We are also extremely pleased to report our first ever positive EBITDA quarter, as our team members and partners worked hard through disruptions in key markets from COVID-19 variants, extreme weather-related events in the southern US, and the external cost inflation in our logistic and fulfillment operations. In addition, new customer activity remains strong, and we are confident in our outlook for organic growth, highlighted by our recent launch of Canada's first compostable and Microwavable To Go Containers." (See good natured Products stock analysis on TipRanks)
Earlier in May, Paradigm Capital analyst Corey Hammill maintained a Buy rating on GDNP while raising its price target to C$1.85 (from C$1.50) for 66.7% upside potential.
Hammill stated, “GDNP offers investors a unique way to invest in the plant-based space without the infancy risk of many companies in the industry. There are several near-term growth opportunities for the company — new products, new customers, cross-selling and acquisitions — which are expected to drive revenue growth. Management has the experience and a proven track record of growing the company from early stage to the $10-million revenue mark while successfully integrating several acquisitions. Clearly, the market is moving toward sustainable solutions and GDNP is one of only a handful of pure-play investment vehicles.”
The rest of the Street is bullish on good natured Products with a Strong Buy consensus rating based on 4 Buys. The average analyst price target of C$1.76 implies 58.6% upside potential from current levels.
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