CEA Industries Inc. (CEAD)

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Surna Is Posting Record Revenue Numbers To Kick Off The First Quarter Of 2021
EDITORIAL Apr 27, 2021 • 7:52 AM EDT

4 MIN READ • BY MICHAEL BERGER
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Last week, Surna Inc. (OTCQB: SRNA) released preliminary first quarter numbers and we were impressed with the growth that was reported.

Bookings for the quarter came in at $5.5 million, which is the second highest in the company’s history. When compared to the prior quarter, booking increased by more than 50% (up 388% on a year-over-year basis) and we find this to be significant.

An Execution Story to be Aware of

Last year, we started to closely follow Surna and are favorable on the structure of the operation. The company is focused on commercializing and selling environmental control systems for the controlled environment agriculture (CEA) market and works with some of the world’s largest cannabis companies.

Surna is capitalizing on the ancillary cannabis market and is led by a management team that is laser focused on creating value for shareholders. Over the next decade, we expect to see increasing consumer demand for cannabis and companies will need to increase production capacity to capitalize on the demand.

Surna sells state-of-the-art environmental control systems and cannabis companies will need this type of technology to increase production capacity. One of the reasons we are excited about Surna is related to how the products are efficient from a cultivation and power consumption standpoint. We believe that customers are able to quickly justify the cost of Surna’s products if yields increase and the all-in price per gram decreases.

One of the important parts of the operational update is related to how Surna sold products to non-cannabis companies. We believe the company has a large total addressable market (TAM) since the products can be used to grow a wide variety of high-value crops. If Surna can start to capitalize on additional verticals, we expect to see more interest in the company and will monitor this aspect of the story.

An Under-appreciated Growth Story

At current levels, Surna is trading at a considerable discount to its peers and we find the risk-reward profile to be favorable. During the last year, the management team has slashed expenses and is focused on profitability. We believe the market is missing out on something significant with Surna and find its valuation to be compelling.

In the operational update, Surna attributed the growth to its expanded technology offerings as well as its continued aggressive sales and marketing efforts. Although COVID scared the market in the first half of 2020, there has been a substantial increase in the number of cannabis facilities in North America. We believe this trend will create a positive tailwind for Surna and are bullish on this.

we believe Surna is well positioned to continue to deliver strong growth, sign contracts with additional clients, and expand the product offering. If you are interested in learning more about Surna, please send an email to [e-mail] with the subject “Surna” to be added to our distribution list.

https://technical420.com/cannabis-article/surna-is-posting-record-revenue-numbers-to-kick-off-the-first-quarter-of-2021/#