MustGrow Biologics Corp. (TSX-V:MGRO, OTCQB:MGROF) gaining approval to sell its mustard-based biofertility product TerraSante in Oregon is another positive driver for the company's revenue growth, analysts at Noble believe.
In a note to clients, the analysts highlighted that the Oregon approval comes after MustGrow also secured state-level registration for TerraSante in Washington.
“The Oregon approval provides MustGrow with another agriculture-rich state, with the state recording $5 billion in agriculture production on 16 million acres of farmland in 2021, which generated 13% of the states’ gross domestic product,” they wrote.
“With the sales and marketing commercialization strategy in conjunction with BioAg Product Strategies in place for the 2024 planting season, we believe adding Oregon provides another positive to top-line revenue growth for the company.”
They highlighted MustGrow’s focus on increasing the number of state approvals it has achieved, with additional registrations progressing in key jurisdictions.
“We would not be surprised to see more approvals from other states, as we believe MustGrow’s TerraSante provides a competitive organic alternative that benefits from an increasing trend of organic farming practices,” they wrote.
The Noble analysts reiterated their ‘Market Perform’ rating on MustGrow.
“We believe substantial opportunity exits for natural alternatives in the company’s targeted end markets, such as preplant soil fumigation, bioherbicides, postharvest food preservation, soil amendment, and biofertility,” they wrote.
They believe the company has a solid balance sheet that should tide it over until it begins to generate revenue.
“We believe there is additional operating leverage as the company scales revenue,” they wrote.
Shares of MustGrow traded up 5.2% at C$1.42 on Wednesday morning.