Following the company’s third quarter results, Beacon Securities analyst Vahan Ajamian says he is impressed with the scale of what Cronos Group (TSXV:MJN) is doing.

On November 27, Cronos Group reported its Q3, 2017 results. The company generated Adjusted EBITDA of negative $500,000 on revenue of $1.3-million,a topline that was up 962 per cent over the scant revenue the company posted in the same period last year.

“We have successfully transformed the company over the past year and a half. We are now focused on executing our strategy to generate accelerated revenue growth and create long-term shareholder value,” said CEO Mike Gorenstein.

Ajamian notes that Cronos Group’s revenue was ahead of consensus expectations. The analyst says he expects revenue growth will continue, pointing to the increased supply of higher margin oils at Peace Naturals, the fact that the company is now growing cannabis in the entirety of Buildings 2 and 3 at peace Naturals, and the construction of Building 4 being on schedule.

In a research update to clients today, Ajamian maintained his “Buy” rating, but raised his one-year price target on Cronos Group from $4.00 to $5.25, implying a return of 21 per cent at the time of publication.

“Cronos has planted the seeds to be a true global player,” the analyst said. “Management has shown to be excellent stewards of shareholder capital. The company has recently raised a few rounds of equity at escalating prices – and without requiring warrants. It has also secured the largest debt facility in the sector, at $40MM with what we view to be attractive terms. Our model shows the company’s resources to be sufficient for its growth plans for the better part of a year, after which we incorporate a final $16MM equity financing. With so much on the go, it can be a challenge to precisely model Cronos’ financials.

Ajamian think Cronos Group will generate EBITDA of negative $3.4-million on revenue of $4.3-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $4.2-million on a topline of $23.4-million the following year.