Youngevity International, Inc. (NASDAQ: YGYI) is a leading omni-direct lifestyle company offering a hybrid of the direct selling business model, that also offers e-commerce and the power of social selling.
The company was recently ranked among the ‘Top 100 Global Direct Selling Companies.’ Along with unique services, Youngevity offers products from the top-selling retail categories. These categories include health/nutrition, home/family, food/beverage, spa/beauty, fashion, essential oils, and photo. The company distributes its products and services via a worldwide network of preferred customers and distributors. A leading Omni-direct lifestyle company, Youngevity International has its corporate headquarters in Chula Vista, California. (source: cannabisnewswire.com)
On October 4th, the company announced the expansion of its HEMPFX line with the launch of two new hemp-derived cannabidiol products: HempFX™ Hydration™ – Sleep and HempFX™ Hydration™ – Pure. Both products are expected to be available in November of this year. These tablet-based products will be used with Youngevity’s Y-DR8+ proprietary, portable water bottle system designed to help provide great tasting water and reduce chemicals found in tap water. The Y-DR8 filter features (ACC) activated carbon cloth and is portable to fit today’s “On the go lifestyle.” The cannabidiol tablets will be housed above the water line and consumed as the water flows over the tablets.
This bottle system is intended to provide people with a revolutionary point-of-use water system for great tasting, water and enables consumers to customize tap water based upon their health and wellness needs. It is a beverage technology that the company expects will have broad consumer appeal and the management is extremely excited to combine this technology with the benefits of hemp-based CBD.
As per management, this announcement comes on the heels of YGYI’s launch of 3 hemp-based products where it is pre-production quantities sold out during its August 2018 sales convention.
With the previous announcements, Analysts tracking the stock believes that Youngevity is now at a critical inflection point and is well poised to take advantage of growth opportunities to serve the emerging demands of the industry. Furthermore, the company’s business and marketing profile is strengthened by its new proprietary HempFX line of hemp-derived cannabidiol oil products and provides excellent revenue growth opportunities across the vertical as it innovates with pioneering products and services.
From an industry perspective, Cannabidiol supplements are set to burst out ahead of biopharma as the Farm Bill legalizes hemp. This is according to CannabisNewsAudio, which recently announced an Audio Press Release (APR) regarding this milestone featuring Youngevity International, Inc. Furthermore, the complete legalization of recreational marijuana is set for Canada this month, so tremendous opportunities exist in this marketplace. (source: cannabisnewswire.com)
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Key investment highlights:
Annual revenue growth from $75 million in 2012 to $166 million in 2017
Operates in two significant and scalable business segments: Direct Selling and the Coffee Industry Driving revenue in significant market segments Including Skin Care, Anti-Aging, Weight Loss, Brain Health and Coffee
Significant growth opportunity from following initiatives:
- Global Expansion into Latin America and Asia
- Newly Launched Tech Platform
- Green Coffee Distribution and Own Brand Expansion
- The launch of Hemp-Based CBD (see www.hempFX.com)
Description & about the Company:
Youngevity International, Inc. (NASDAQ: YGYI) is a leading omni-direct lifestyle company offering a hybrid of the direct selling business model that also offers e-commerce and the power of social selling. Assembling a virtual Main Street of products and services under one corporate entity, Youngevity offers proven products from the six top-selling retail categories: health/nutrition, home/family, food/beverage (including coffee), spa/beauty, apparel/jewelry, as well as innovative services. The company was formed during the summer 2011 merger of Youngevity Essential Life Sciences with Javalution® Coffee Company (now part of the company’s food and beverage division). The resulting company became Youngevity International, Inc. in July 2013.
Major product pipeline: Youngevity International offers more than 2,000 high quality, technologically advanced SKU’under the following categories:
Near-term objectives of the company:
- Complete registration for core product line to launch in Mainland China
- Secure non-dilutive asset-based financing for expanding the capacity of coffee businesses
- Vertically integrate the Hemp Based Non-THC CBD Business
Financials
Revenue – For the three months ended June 30, 2018, the company’ revenues increased by 6.6% to $44,255,000 as compared $41,527,000 for the three months ended June 30, 2017. During the three months ended June 30, 2018, YGYI derived approximately 83% of its revenue from the direct selling sales and approximately 17% of its revenue from its commercial coffee sales.
Profitability – For the three months ended June 30, 2018, gross profit increased by approximately 5.3% to $25,382,000 as compared to $24,102,000 for the three months ended June 30, 2017. Overall gross profit as a percentage of revenues decreased to 57.4%, compared to 58.0% in the same period last year.
For the three months ended June 30, 2018, YGYI reported a net loss of $614,000 as compared to net loss of $2,730,000 for the three months ended June 30, 2017.
Liquidity and financial flexibility – At June 30, 2018, the company had cash and cash equivalents of approximately $700,000 as compared to cash and cash equivalents of $673,000 as of December 31, 2017. Management anticipates revenues to continue to grow and intend to make the necessary cost reductions related to its international operations that are not performing and reduce non-essential expenses.
Key risk factors and potential stock drivers:
- YGYI is on the verge of seeing meaningful results from their current developments. Analysts remain hopeful that these payoffs will take shape quite soon and remain bullish about the stock price.
- YGYI is still an early stage company and will likely operate at a loss as it grows its market position and seeks ways to monetize it. Therefore, any time or cost overrun in its ongoing activities and its impact on business & financial profile will remain a key business sensitivity factor.
- The Company’ ability to maintain liquidity and financial flexibility to fund its incremental capital requirements will remain a challenge for the company. Additionally, the cannabis industry is highly competitive, and Youngevity will be competing with many other and better-financed companies.
- YGYI ability to revamp its sales strategy and to align with mainstream markets would hold the key over the near to medium term.
Stock Performance
Comments:
- On Friday, Oct 12th, 2018, YGYI closed at $13.30, on an above average volume of 6.4M shares exchanging hands. Market capitalization is $286.7 million. The current RSI is 74.64
- In the past 52 weeks, shares of YGYI have traded as low as $3.17 and as high as $10.95
- At $13.30, shares of YGYI are trading above its 50-day moving average (MA) at $5.25 and above its 200-day moving average (MA) at $4.47
- The present support and resistance levels for the stock are at $8.47 & $10.81 respectively.
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