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Last week, Surna Inc. (OTCQB: SRNA), operating as Surna Cultivation Technologies, released second quarter financial results that showed impressive growth on several key profitability and operating metrics.
At current levels, Surna is trading at less than 1x revenue (if you annualized second quarter revenue results) and we believe it has a favorable risk-reward profile. When compared to other ancillary cannabis companies, Surna has a compelling valuation and trades at a considerable discount.
During the last quarter, Surna expanded the amount and the type of products and services that it offers to clients. Through this initiative, the company has made itself stickier with its customers and we expect this development to have a favorable impact on the average amount of revenue that is generated by each client.
2021 is proving to be a banner year for Surna and we believe there is a disconnect with how the market understands and appreciates the opportunity. So far this year, the management team has made impressive progress with how it has executed on its strategic growth plan, and we believe the business has significant potential catalysts for growth.
An Execution Story in the Making
In order to provide a better understanding of Surna, we want to highlight some of the most impactful metrics from the second quarter and believe that our readers should be aware of these milestones:
- Generated $4.5 million of revenue which represents a 168% increase on a year-over-year basis
- Gross profit for the second quarter was $1.3 million which represents a 367% increase when compared to the same period last year
- Recorded positive operating and net income which is substantially better than the loss that was reported in the same period last year
- As of June 30th, Surna had $1.6 million of cash,cash equivalents and restricted cash
Creating Value Through a Unique Organic Growth Strategy
A few months ago, Surna announced an organic growth strategy that would be centered around addressing new markets and adding new products and services. The company’s second quarter financial results show how the management team has been executing on this strategy and we are favorable on how the business has recovered from the pandemic.
Through Surna’s addition of their architectural design services, the business is better positioned to reach potential clients earlier in the design and decision process and we will monitor how this new service supports the growth of the business.
We believe the business is well positioned to capitalize on new opportunities. Surna CEO Tony McDonald stated that the company’s future project pipeline is robust and expects the strong sales momentum to accelerate as the team continues to execute its growth strategy.
If you are interested in learning about Surna, please send an email to support@technical420.com with the subject “Surna Cultivation Technologies” to be added to our distribution list.
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Pursuant to an agreement between StoneBridge Partners LLC and Surna Inc. (SRNA) we have been hired for a period of 180 days beginning April 12, 2021 and ending October 12, 2021 to publicly disseminate information about (SRNA) including on the Website and other media including Facebook and Twitter. We are being paid $7,000 per month (SRNA) for or were paid “0” shares of restricted common shares. We own zero shares of (SRNA), which we purchased in the open market. We plan to sell the “ZERO” shares of (SRNA) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (SRNA) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.
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