Post by
davgro on May 16, 2023 10:16am
Lackluster 2023 Q1 Results - NDVA Guidance is Worrisome
Nothing in the 2023 Q1 financial results cause me to jump with joy. NDVA continues to report a quarterly comprehensive loss of $2.3M even with the operating expenses in the quarter decreasing 16.7% sequentially, and 7.7% year-over-year. Company reported a large quarterly impairment charge on inventory of $0.8M.
Most worrisome is the furture guidance provided by management:
The Company expects Q2 2023 net revenue to improve compared to the same period last year; however, there is risk that net revenue may decline sequentially, if sales of new products fail to offset lower sales of ingestible extracts as a result of Health Canada's recent order to stop production and sale of these products. Sequential growth in net revenue is expected to resume in the second half of 2023 driven by the introduction of new products in the third and fourth quarters, resulting primarily from in-house innovation.
The uncertain guidance will surely supress any share price gains moving forward barring a takeout offer for the company. Muted market reaction to this morning's earnings announcement is not unexpected.
It will be interesting to see how the market reacts after the 10:30 AM EST conference call this morning. Cannabis sector is selling off again this morning with new 52-week low for OGI. This sector is "dead money" for the forseeable future.