Cyanotech Stock Impressed Investors, Amid Strong Third Quarter Results

    Author Siraj SarwarPosted on Categories Consumer, Consumer Packaged Goods
    Cyanotech Stock

    Cyanotech Corporation (NASDAQ:CYAN) shares soared more than 37% in Tuesday trade, supported by solid financial numbers for the third quarter. The company’s revenue grew 20% year over year to $9.15 million, while earnings per share of $0.19 rose 416.7%. Cyanotech stock is impressive right now.

    The stock currently trades around the highest level in the past 52-weeks. Although its valuations are significantly higher due to losses in the past quarters, a strong fundamental outlook could provide support to the share price.

    Its stock trades around 64 times to earnings in the trailing twelve months. However, the improvement in financial numbers will ease its higher price to earnings ratio.

    Cyanotech Stock

    Source Image: finviz.com

    Solid Third Quarter Results

    The growth of 20% in Cyanotech sales was due to an increase of 23% in sales of its packaged products. The Improving demand for its bulk products added to the revenue growth in the third quarter. The company’s strategy of increasing the strategic channels allowed it to generate substantial growth in sales. It also continues to increase its penetration in international markets.

    International sales accounted for 24% of the total sales in Q3, compared to 23% for the same period last year.

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    Its CEO stated:“Cyanotech’s positive results directly reflect our continued, long-term strategic marketing focus on building our consumer brands, as well as improvement in astaxanthin production volumes compared to last year.”

    Cyanotech’s gross margin of 46.3% improved 8.7% in Q3 from prior year period, thanks to lower cost of production for astaxanthin and spirulina.

    Lower production costs and higher sales led the company to generate positive net income of $1.1 million in Q3, compared to a net loss of $349,000 in the same period last year.

    Here’s What to Expect

    The company expects to sustain the momentum in the following quarter. It now plans to focus on its Nutrex Hawaii consumer products to establish them to a broader consumer market. On the other hand, it is also determined to advance its cost-cutting strategies for both astaxanthin and spirulina. Overall, the company is setting foot-hold for the sustainable future growth.

    Featured Image: cyanotech.com

    Author Siraj Sarwar
    About the author: Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.