Friday, June 24, 2022

Signal Bay Inc (OTCMKTS:SGBY) Posts Another Strong Data Set

Signal Bay Inc (OTCMKTS:SGBY) is a stock in the cannabis patch on the services side that we have looked at several times over the past year, always with a relatively positive take. In the overly-hyped marijuana space, that is often somewhat tough to do with any one of these stocks. In this case, we have been largely correct as the stock has roughly doubled over our coverage time horizon. Recent financial data just hit the market and provides the next big benchmark. Hence, it’s a good time to revisit this name.

The big headline is about top-line growth: the company just reported a strong 2016 as a whole, and also noted that its Q1 2017 sales total exceeded all four quarters of 2016 combined. In our many musings on the cannabis space, one tenet has perhaps stood out: Since the vote was in November of 2016 that massively expanded the legal market, companies in the cannabis space that are for real should have their best quarter ever in Q1 2017. SGBY doesn’t fail that test.

Signal Bay Inc (OTCMKTS:SGBY) casts itself as a company that provides advisory, management, and analytical testing services to the legalized cannabis industry in the United States.

The company offers industry research; business and market intelligence; and advisory and consulting services, including license application support, regulatory compliance, market forecasts, and operational insights.

It also publishes industry information through online media, research reports, and publications; and operates, a business to business information portal, as well as, a general interest informational Website.

In addition, the company provides Cannabis Consultant Marketplace, an outsourcing freelancing matching platform to enable cannabis companies to post projects and hire consultants.

Further, it provides operating services; and operates CR Labs, Inc., which offers analytical testing services, such as residual solvent analysis, pesticide screening, microbiological screening, terpene analysis, and cannabinoid potency profiling of cannabis and cannabis-infused products to growers, processors, and dispensaries.

According to company materials, “Signal Bay, Inc. is an Oregon-based Life Sciences company. Through its three subsidiaries: EVIO Labs, Signal Bay Research and Signal Bay Services; the Company provides research, consulting services, and analytical testing services to the legal cannabis industry. The Company’s EVIO Labs division operates state-of-the-art testing facilities and offers accredited testing methodologies performed by a qualified team of scientists to ensure the safety and quality of the nation’s cannabis supply.”

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Note, as suggested above, EVIO Labs is really the horse pulling the cart that is this company right now. And EVIO growth did not disappoint, with y/y revenue growth in the unit up 1,334% in the latest report. Perhaps the best news here is that the company is immediately plowing capital right back in, opening up two more EVIO lab sites over the past quarter. The ROI has been high, in top line terms, for the unit. So it makes basic sense.

“We reported another quarter of record revenues, up 298% from the previous quarter,” commented William Waldrop, co-founder and CEO of Signal Bay Inc. “These results were driven by the acquisition of the operating testing facility in Portland, Oregon combined with increased mandatory cannabis testing requirements implemented statewide on October 1.”

Mr. Waldrop continued, “Even with modifications to some of the Oregon testing rules, we are forecasting strong second quarter revenue growth.  We will continue to build out the Company’s infrastructure that will drive our regional and national growth strategy.”

The chart shows 5% during the past month in terms of shareholder gains in the name. Furthermore, the company has registered increased average transaction volume recently, with the past month seeing 59% over what the stock has registered over the longer term.

Now commanding a market cap of $22.9M, SGBY has about $150K in cash on the books, which stands against about $1.1M in total current liabilities. One should also note that debt has been growing over recent quarters. SGBY is pulling in trailing 12-month revenues of $561K. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 294%. We will update the story again soon as developments transpire. For continuing coverage on shares of $SGBY stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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