Expansions can be extremely beneficial for a business and that is the case for the pharmaceutical wholesale provider – Cosmos Health Inc. (NASDAQ: COSM). After adding a new German drug wholesaler under its umbrella, COSM appears to be on track to extend its reach throughout the whole European market. As this recent acquisition is set to boost the company’s revenues by 70%, the COSM stock price could be set to increase in the near term.
COSM Fundamentals
After adding Docpharm to its portfolio of subsidiaries, COSM now controls 4 subsidiaries within Europe where 2 subsidiaries are based in Greece – Skypharm and Cosmopharm, DHS in the UK, and finally Docpharm in Germany. All of these subsidiaries play a critical role in COSM’s growth since they extend its reach throughout the entirety of Europe.
At the same time, Docpharm’s addition has a substantial strategic benefit for COSM since Germany has the largest pharmaceutical market in Europe. With this in mind, the German market accounts for a 5.9% share of the global pharmaceutical market. If COSM is able to gain a fraction of this market, it could account for a major increase in revenue.
Europe’s pharmaceutical market is unique in that it is governed by a supranational institution that regulates drug approval throughout the continent which means that COSM’s subsidiaries are not shackled by border restrictions. In this way, Docpharm and the Greek wholesalers can freely trade with pharmacies in neighboring countries. That said, the Greek wholesalers provide COSM with access to the Balkans while Docpharm provides access to Western Europe.
Through these subsidiaries, COSM has a solid grip on the European pharmaceutical market which was worth $282.5 billion in 2020 and is expected to grow at a CAGR of 5.4% through 2028. As these subsidiaries develop they are likely to grow their reach and envelope more of Europe’s gargantuan pharmaceutical market. For this reason, COSM stock could be a bargain at its current PPS.
COSM Financials
COSM’s balance sheet is extremely promising. According to its Q1 report its assets remained at $68 million QoQ, which said its cash, and cash equivalents decreased from $20.7 million to $12 million. This might seem like a significant loss if not for COSM’s stark drop in liabilities as current liabilities dropped from $21.7 million to $18.5 million, and total liabilities decreased from $28.3 million to $23.6 million.
COSM revenues decreased slightly YoY from $13 million to $12.3 million. That said, its operating expenses jumped from $1.6 million to $3.6 million. In this way, COSM reported a net loss of $459.8 thousand compared to a net income of $203.3 thousand in Q1 2022.
Technical Analysis
COSM stock is in a neutral trend with the stock trading in a sideways channel between the support at $2.94 and the resistance at $3.65. Looking at the indicators, COSM stock is below the 200, 50, and 21 MAs which are bearish indications. Meanwhile, the RSI is neutral at 37 and the MACD is neutral.
As for the fundamentals, COSM recently witnessed a catalyst in its acquisition of Docpharm which is expected to boost its revenues by 70%. Given that this acquisition extends the company’s reach across Europe, the COSM stock could be poised to appreciate to reflect Docpharm’s added value.
COSM Forecast
COSM Stock may surge due to increased revenue brought about by its purchase of Docpharm. As a result of the acquisition, COSM now has an entry point into Western Europe that compliments COSM’s Greek subsidiaries. As is, COSM is expanding its reach into Europe’s $282 Billion dollar pharmaceutical market, and as a result, COSM stock may surge due to the expected surge in revenue.
COSM Fundamentals
After adding Docpharm to its portfolio of subsidiaries, COSM now controls 4 subsidiaries within Europe where 2 subsidiaries are based in Greece – Skypharm and Cosmopharm, DHS in the UK, and finally Docpharm in Germany. All of these subsidiaries play a critical role in COSM’s growth since they extend its reach throughout the entirety of Europe.
At the same time, Docpharm’s addition has a substantial strategic benefit for COSM since Germany has the largest pharmaceutical market in Europe. With this in mind, the German market accounts for a 5.9% share of the global pharmaceutical market. If COSM is able to gain a fraction of this market, it could account for a major increase in revenue.
Europe’s pharmaceutical market is unique in that it is governed by a supranational institution that regulates drug approval throughout the continent which means that COSM’s subsidiaries are not shackled by border restrictions. In this way, Docpharm and the Greek wholesalers can freely trade with pharmacies in neighboring countries. That said, the Greek wholesalers provide COSM with access to the Balkans while Docpharm provides access to Western Europe.
Through these subsidiaries, COSM has a solid grip on the European pharmaceutical market which was worth $282.5 billion in 2020 and is expected to grow at a CAGR of 5.4% through 2028. As these subsidiaries develop they are likely to grow their reach and envelope more of Europe’s gargantuan pharmaceutical market. For this reason, COSM stock could be a bargain at its current PPS.
COSM Financials
COSM’s balance sheet is extremely promising. According to its Q1 report its assets remained at $68 million QoQ, which said its cash, and cash equivalents decreased from $20.7 million to $12 million. This might seem like a significant loss if not for COSM’s stark drop in liabilities as current liabilities dropped from $21.7 million to $18.5 million, and total liabilities decreased from $28.3 million to $23.6 million.
COSM revenues decreased slightly YoY from $13 million to $12.3 million. That said, its operating expenses jumped from $1.6 million to $3.6 million. In this way, COSM reported a net loss of $459.8 thousand compared to a net income of $203.3 thousand in Q1 2022.
Technical Analysis
COSM stock is in a neutral trend with the stock trading in a sideways channel between the support at $2.94 and the resistance at $3.65. Looking at the indicators, COSM stock is below the 200, 50, and 21 MAs which are bearish indications. Meanwhile, the RSI is neutral at 37 and the MACD is neutral.
As for the fundamentals, COSM recently witnessed a catalyst in its acquisition of Docpharm which is expected to boost its revenues by 70%. Given that this acquisition extends the company’s reach across Europe, the COSM stock could be poised to appreciate to reflect Docpharm’s added value.
COSM Forecast
COSM Stock may surge due to increased revenue brought about by its purchase of Docpharm. As a result of the acquisition, COSM now has an entry point into Western Europe that compliments COSM’s Greek subsidiaries. As is, COSM is expanding its reach into Europe’s $282 Billion dollar pharmaceutical market, and as a result, COSM stock may surge due to the expected surge in revenue.