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Coverage Initiated on Health & Wellness Firm About to Launch Retail Sales, Sees 'Substantial Upside Potential'

Source: Streetwise Reports

 

March 31, 2021 (Investorideas.com Newswire) Clarus Securities' initiation report on Rritual Superfoods views the company "as an attractive growth story for investors looking to gain exposure to a large and rapidly growing functional food and beverages market."


In a March 12 research note, analyst George Ulybyshev reported that Clarus Securities initiated coverage on Rritual Superfoods Inc. (RSF:CSE), which is "expected to commence retail sales of its first line of products in the U.S. in Q2/21, followed by a rollout in Canada."

Clarus assigned Rritual a Speculative Buy rating and a 12-month target price of CA$1.50 per share. Currently, the company's share price is about CA$0.90.

"With an asset-light business model and a compelling go-to-market strategy, we believe Rritual is well positioned to rapidly scale its revenues, achieve profitability and become one of the leading premium brands within the functional food and supplements industry," Ulybyshev wrote.

Rritual develops and distributes premium plant and mushroom-based products featuring adaptogen ingredients providing specific therapeutic benefits. Currently, the company is selling three mushroom-based powdered products online as part of its soft launch: "Chaga to help immune system, Reishi to assist with stress relief, and Lion's Mane for cognitive focus."

Ulybyshev highlighted three key strategies Rritual is employing as it moves forward.

One, in going after the mushroom adaptogen segment, it is "targeting a rapidly growing and highly fragmented market," he wrote. The market, characterized by numerous companies with single product lines, is expected to expand over the next several years, due to a consumer shift toward natural, functional foods and adaptogen-based products from processed foods.

This "presents an opportunity for Rritual to build a recognizable brand and emerge as one of the dominant players in the space," Ulybyshev noted.

Two, the Vancouver, British Columbia-based health and wellness firm is capitalizing on its senior management's expertise in building natural health products brands along with its relationships in the industry, to achieve rapid adoption of its products. During the first phase of its upcoming commercial product launch, Rritual plans to have its products in 3,700-plus retail stores in the U.S. and Canada and then in the second phase, potentially as early as 2022, in another 14,000-plus stores.

With this insider knowledge, Rritual should "achieve higher than typical store penetration rates, rapidly grow its revenues and potentially cross-sell additional products over time, giving it a substantial competitive advantage over its peers," indicated Ulybyshev.

Three, Rritual is "building a diversified and recurring revenue stream with a clear path to profitability," according to Ulybyshev, and Clarus expects it will become adjusted EBITDA positive by next year. Early in its product launch, the company intends to complement its retail presence with a comprehensive, omnichannel e-commerce marketing campaign. Subsequently, it will expand its customer base with additional product lines, geographical expansion and, perhaps, tuck-in acquisitions.

Clarus projects Rritual's sales in 2021 to reach CA$5.1 million and more than quadruple to CA$21.2 million in 2022, Ulybyshev relayed.

The company completed an initial public offering in March 2021 from which it generated $6 million in gross proceeds. It intends to use those funds to develop additional products, expand operationally and carry out various marketing initiatives to build brand awareness and garner sales. Rritual has about $6 million in cash, enough, Ulybyshev purported, to see it through 12 months of operations.

"Between additional North American store penetration, online expansion and the launch of new product lines, we see substantial upside potential to our current revenue estimates and view Rritual as an attractive growth story for investors looking to gain exposure to a large and rapidly growing functional food and beverages market," Ulybyshev concluded.

Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Rritual Superfoods, a company mentioned in this article.

6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

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