- A report obtained from a closed group email newsletter shows that analysts consider the PlantX stock (VEGA.CN), (PLTXF:OTC US) and (WNT:Frankfurt) to be substantially undervalued.
- The new price target of CA$0.89 is set for 7/30/2023 which represents an eightfold increase from the current share price of CA$0.08
Many hedge fund analysts keep their cards close to their chest, well, this has been the case with a credible flagship fund that deals with accredited investors. However this PlantX Analyst Report shows that analysts of the fund set a price target of CA$0.89 for 7/30/2023 for the stock, which currently trades at .08 cents 3/14/2023.
Reasons for the new PlantX valuation and price target:
The report cites several justifications for increasing the price target. Having tracked previous reports on this stock and considering the updates analysts made, some interesting facts stand out. Below is an additional interpretation of what this means:
- Reduced marketing expenses from 49% to 35% as a percentage of revenue: Ecommerce platforms that rely on SEO and digital marketing, face their biggest expense during the startup phase. The majority of SEO work has now been completed and 5000+ products were onboarded.
- Unjustifiably cheap valuation versus peers: The report states that currently, the company trades at half their estimated 2022 revenue run rate, representing a low multiple of 0.89 P/S. This contrasts starkly with other players in the same industry which trades between a 4-7.5 P/S multiple, notwithstanding market conditions. The report states a bear-bull range where the price target is CA$0.89-CA$4.82.
- Amazon and Walmart engagements: Merely by also listing products on Amazon and Walmart, the analysts believe that revenue for 2023 can grow a further 12%. This does not include other sources of revenue, for example the fact that corporate workplaces like Apple and Tesla buy PlantX owned brands for their staff meals. Yet given this statistic, the report did not mention the obvious, which is that PlantX is safely diversified in terms of marketing channels. The anticipated revenue of Amazon and Walmart combined still represents a minority of its revenue share.
Download it here: PlantX Analyst Report
Although the report did not specifically mention the following factors under its rationale for the increased share price valuation, it made mention of potentially crucial revenue drivers. These include the introduction of the “PlantXPress” subscription model of $24.95/month which is quite similar to Amazon Prime. A logical interpretation of what this means in terms of shareholder value shows that one cannot underestimate the lifetime value potential.
This is because food items revolving around brand cults represent an exceedingly high customer lifetime value with repeat purchases as people form new habits around new favorite meal times. The company is already striking out with a variation of this loyalty program with its “XVIP” subscription for $29.99/month.
Conclusion:
This report is somewhat of an eye opener if we consider that PlantX is a way to play a much larger trend which is supported by the WEF and numerous big institutional investors.
The difficulty in analyzing small cap stocks and determining a fair valuation is that investment funds seeking to maximize their profits on a stock, will often not reveal their analysis. This can easily leaves day traders and smaller investors with a choice of either relying on often inaccurate penny stock rumors, or to stick to S&P500 stocks, where analyst opinions are freely available. In this particular case, trend predictions for the plant based food industry can be helpful, along with search data of just how popular all the brands are that are listed on the PlantX marketplace.
Anyone seeking a way to obtain similar insider reports, one way of doing this is to subscribe to as many investment fund newsletters as possible. It might seem like a lonely road at first – but once reaching a head count of 25 and above, valuable reports like these can find their way to your inbox.
Disclaimer: At the time of publication the author is NOT a shareholder of the company and is not intent on trading this stock. This content is for informational purposes only and does not constitute investment advice.
