Can Focus on High-Growth Area Up OrganiGram (OGI) Q1 Earnings?

OrganiGram Holdings Inc. OGI is slated to release first-quarter fiscal 2020 results on Jan 14, after market close.

In the last reported quarter, the company registered a loss of 5 cents per share compared with the Zacks Consensus Estimate of a break-even.

Let’s take a look at how things are shaping up prior to this announcement.

Key Catalysts

Similar to the last reported quarter, OrganiGram is expected to have gained from a deepened focus on building its brand equity, ongoing product research and development to introduce innovative and differentiated products as well as leading cultivation and manufacturing practices.

Further, the company’s recent retail store openings and Health Canada’s approval for the licensing of 17 additional cultivation rooms under the Cannabis Regulations (that took place in September 2019) might have strongly contributed to the yet-to-be-reported quarter’s top-line numbers.

Organigram Holdings Inc. Price and EPS Surprise

Organigram Holdings Inc. Price and EPS Surprise

Organigram Holdings Inc. price-eps-surprise | Organigram Holdings Inc. Quote

Overall, the company projects the fiscal first quarter to have improved significantly from the fourth quarter of 2019 in terms of net revenues and adjusted gross margin. Revenue growth is envisioned to have been sequentially strong, banking on the company’s strategic initiatives to adjust production mix for meeting demand based on consumer insights. Margin expansion is expected to have been aided by a rise in net revenues including the higher proportion of wholesale revenues and the lower cost of sales as well as indirect production expenses.

Meanwhile, the Zacks Consensus Estimate for first-quarter 2020 adjusted loss of 2 cents suggests no change from the year-ago reported figure. The consensus mark for revenues is currently pegged at $16.28 billion.

What the Quantitative Model Predicts:

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for delivering a beat. This is exactly the case here as you will see below.

Earnings ESP: OrganiGram has an Earnings ESP of +10.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: OrganiGram carries a Zacks Rank #3.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering as these too have the right combination of elements to beat on earnings this reporting cycle.

Intersect ENT XENT has an Earnings ESP of +8.54% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation EXAS has an Earnings ESP of +3.20% and a Zacks Rank of 1.

NuVasive NUVA has an Earnings ESP of +0.88% and is Zacks #3 Ranked.

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Intersect ENT, Inc. (XENT) : Free Stock Analysis Report
 
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