Ahead of the company’s Q1 results, Echelon Wealth Partners analyst Russell Stanley is maintaining his “Speculative Buy” rating on MPX Bioceutical (MPX Stock Quote, Chart CSE:MPX).

On Wednesday, after market close, MPX will report its first quarter, 2019 results. Stanley thinks MPX will generate EBITDA of negative $600,000 on revenue of $12.5-million, which would be sequential revenue growth of 57 per cent.

“MPX’s Holistic operations will make its first full quarter of contribution, and is the main driver of sequential improvement,” the analyst said of the upcoming results. “Organic growth in Arizona and Nevada operations should also benefit the top line.”

In a research update to clients today, Stanley maintained his “Speculative Buy” rating and one-year price target of $1.40, implying a return of 43 per cent at the time of publication.

Stanley thinks MPX will generate Adjusted EBITDA of $15.5-million on revenue of $96.9-million in fiscal 2019. He expects those numbers will improve to EBITDA of $52.1-million on a topline of $172.5-million the following year.

MPX Stock Attractive

The analyst says investors should look at MPX, which has operations in Arizona, Nevada, Massachusetts and Maryland because U.S. operators are trading at a discount to their Canadian peers.

“As of yesterday’s close, the EV/C2019E EBITDA multiple discount for US operators relative to Canadian ones has reached 68% (vs. the 38% average). This is the highest proportional discount since December 2017 (when it also reached 68%) and the highest absolute multiple discount (at 34.5x) in our tracking history.