NewAge, Inc.

NBEV Details

NewAge, Inc. (NASDAQ: NBEV) develops and distributes a portfolio of healthy products primarily through a direct-to-consumer (D2C) business model via a network of brand partners and distributors in more than 50 countries. Its products are grouped into three categories: health and wellness, healthy appearance, and nutritional performance. It boasts a worldwide network of over 400,000 exclusive independent brand partners. More than 72% of the company's sales, including auto-delivery subscriptions, is ordered and fulfilled online, and over 85% of its items are delivered straight to customers' homes. As of August 25, 2021, the company's market capitalization stood at USD 248.95 million.

Launching App for Independent Distributors: On August 6, 2021, NBEV and Verb Technology Company, Inc., a leader in interactive video-based digital applications, announced a partnership to launch the NewAge Share app, an interactive video-based demand generation solution, to help its global brand partners and independent distributors increase customer engagement and sales productivity.

Management Changes: On July 21, 2021, NBEV announced the immediate hiring of Kevin Manion as its CFO. Mr. Manion was the CFO for Calavo Growers, a fresh food firm, before joining NBEV.

H1FY21 Results: The company reported a sharp uptick of 97.54% in net revenues to USD 249.56 million during H1FY21 (ended June 30, 2021) compared to USD 126.33 million during H1FY20, primarily due to the acquisitions of ARIIX and Aliven. NBEV witnessed a decline in net losses to USD 0.40 million during H1FY21, vs. USD 21.17 million during H1FY20. As of June 30, 2021, the company had cash and cash equivalents of USD 80.92 million and a total debt of USD 47.72 million.

Key Risks: Tahitian Noni Juice, TruAge Max, Nutrifii, and Slenderiiz accounted for over 70% of NBEV's total sales in FY20. As a result, any decrease in demand for these items and intense competition in the sector in which NBEV competes might harm the company's financial performance. Furthermore, NBEV relies on a single production plant in Tahiti for noni puree used in all noni-based products. As a result, any interruption in the manufacturing process might negatively influence the company's operations.

NBEV Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: NBEV stock price fell 47.80% in the past nine months and is currently leaning towards the lower band of its 52-week range of USD 1.53 to USD 4.55. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 38.23. On technical indicators, NBEV's daily chart made a bullish reversal trend on August 19, 2021, with decreasing volumes indicating a further downside trend. Also, a shooting star candlestick pattern was seen in the 21 SMA weekly charts, followed by the confirmation candle, indicating a bearish grip with a weak structure.

Considering the technical indicators, significant fall in the stock price, and associated risks, we recommend a "Sell" rating on the stock at the closing price of USD 1.78, down 2.20% as of August 25, 2021.

* All forecasted figures and Industry Information have been taken from REFINITIV.

* The reference data in this report has been partly sourced from REFINITIV.

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