Emblem Corp has 111% upside, says Echelon Wealth Partners

Positive news on patient acquisition helps to underscore the value in Emblem Corp. (Emblem Corp. Stock Quote, Chart, News: TSXV:EMC) says Echelon Wealth Partners analyst Russell Stanley.

This morning, Emblem Corp. announced progress in its patient acquisition program, noting that it now has 2091 active and pending patients.

“We are extremely pleased with the progress made since the launch of our website to attract and register patients at such an accelerated rate,” said CEO Gordon Fox. “We believe that our patient growth is a favourable reflection on the quality of our cannabis products, our customer service and our physician and patient communication strategies.”

Stanley says this data demonstrates strong growth at Emblem Corp.

“We view today’s news positively for the following reasons,” said the analyst. “(The) Current Active Patient Count Can Support $3.1M to $4.3M in Revenue – Emblem reported a total of 2,091 active-and-pending patients have registered since the opening of its patient fulfillment website in late November 2016. This patient count excludes expired and disabled registrations. Assuming a realized price of $8/gram, and average daily consumption of 0.5-0.7 grams/day per patient, this implies that the current active patient count represents annualized revenue potential of $3.1-$4.3M. Moreover, patient registrations are accelerating.”

In a research update to clients today, Stanley maintained his “Speculative Buy” rating and one-year price target of $5.25, implying a return of 111 per cent at the time of publication.

Stanley thinks Emblem will post EBITDA of negative $7.1-million on revenue of $7.0-million in fiscal 2017. He thinks these numbers will improve to positive EBITDA of $5.6-million on a topline of $35.1-million the following year.

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