Beacon Securities CoverageVext Science has thus far flown under many radar screens, despite excellent fundamentals. The company already generates 1st quartile performance, based on its opertaing cash flow and EBITDA margins for Q3/20. Those results reflect only a partial contribution from the recent opening of a 2nd Phoenix-area dispensary, setting up sequential improvement in Q4/2020.
We understand the wholesale operation has 80%+ penetration of the staewide dispensary count (123 locations) and the cultivation/manufacturing expansion already underway should drive additional near-term growth, with completion expected in Q1/2021 (just as adult use doors could be opening).
We beleive these fundamentals make VEXT a very timely investment opportunity, through this window could be short lived. With several MSOs already active on the M&A front in Arizona, and others likely to join the hunt, we believe in Arizona, and others likely to join th ehunt, we believe VEXT could be a very attractive acquisition candidate that offers current cash flow and significant growth potential.
Buy rating $2.25/share