HPCO Stock Price Prediction for 2022: $20
MY HPCO Price Prediction is $20 per share in 2022. I like the stock.
HPCO IPOed on August 30th 2022 and now we will see how the stock performs over the next few days.
I want to give you my thesis on why I bought HPCO stock and how I believe the stock will play itself out over the next couple of weeks.
This isn’t financial advice. I’m just giving you my entire thought process and combining hours of research on one page.
HPCO Price Forecast: $20
InvestorTrip’s 2022 Price target for Hempacco stock is $30 per share. The bull case is massive for HPCO shares because GCT soared to $60 after its August IPO and something similar could happen to HPCO.
HPCO Price Targets for 2022
| 2022 Price Target (per share) | Details |
|---|---|
| Fair Value: $20 | Hempacco grows revenue and uses the proceeds from the IPO to strengthen its balance sheet and scale production |
| Bull Case: $30 | HPCO stock soars to the moon after its IPO and does a 5x just like GCT |
| Bear Case: $10 | Higher interest rates scare away investors and the stock does a 2x after its IPO |
Overview
Hempacco is a US based CBD and hemp-based cigarette company with headquarters in California, USA. The company plans to disrupt the $1 trillion global tobacco industry by offering smokers a non-nicotine and tobbaco alternative.
The Real Stuff™ is Hempacco’s flagship hemp cigarette, packaged in packs of 20, with 0% THC.
Hempacco has a 53,000 sq. ft warehouse in San Diego, California that makes hemp cigarette alternatives with the ability to produce 30 million hemp cigarettes per month.
Hempacco is vertically integrated from farm to shelf and even produces private label hemp cigarettes for 3rd parties under its brand, Hempacco Packaging.
The company’s goal is to sell pure hemp-based cigarettes in a machine rolled fashion (replacing the original look and feel of a regular tobacco cigarette) without the harmful effects of tobacco use.
Hempacco distributes its hemp cigarettes across 600 retail kiosks throughout the United States and could expand even further after a successful IPO.
Read HPCO’s SEC Prospectus if you want a comprehensive overview of the company.
IPO Details
The company generated $1.2 million in revenue during Q2 2022 and filed for its NASDAQ IPO to tap the equity markets for extra liquidity.
The IPO offers 1,000,000 shares for a total of $6 million. There will be around 23 million shares outstanding once the IPO is completed. Public shareholders will own around 5% of the total shares outstanding.
Insiders have a 180 day lockup period until they can sell shares ending on February 26, 2023.
There are no tradable options available for HPCO stock. You can only buy HPCO shares or short the stock.
Valuation
Now, let’s talk HPCO fundamentals to provide a more comprehensive outlook on the company.
The IPO values the entire company at around $130 million. There will be 23,010,124 shares outstanding once the IPO is completed.
The company will receive around $5 million from this offering to fund growth and expansion. That’s definitely a good sign because Hempacco holds just $67,000 on its balance sheet.
Total revenue so far in 2022 reached $2.8, giving HPCO an approx. annual revenue of $5.6 million (assuming growth remains steady). HPCO revenue is on pace to grow over 300% in 2022 so this could be a major winner if HPCO maintains this sales growth.
Hempacco Revenue Growth Over Last 3 Years
| Year | Revenue |
|---|---|
| 2020 | $345,989 |
| 2021 | $1,187,273 |
| 2022 (As of Q2) | $2,846,223 |
HPCO shares will debut at a Price to Sales ratio of 23. It’s not the cheapest IPO out there but growth does look attractive.
Let’s compare HPCO with some of its competitors in terms of P/S ratios:
| Company | P/S Ratio |
|---|---|
| Hempacco (HPCO) | 24 |
| Altria (MO) | 3 |
| British American Tobacco (BTI) | 3 |
Both Altria and British American Tobacco have market caps between $80 and $90 billion. Of course, these companies trade at a lower P/S ratio because they are profitable and well established.
Growth stocks trade at premiums and it’s not surprising to see such a wide gap. The good news is that HPCO is a major disruptor and could be acquired by Altria or another tobacco company in the future for a premium.
My YOLO Investment Thesis
I watched GCT stock soar all the way to $60 from its initial IPO price of $12.25 per share. That’s nearly a 5x during the first 2 days of trading.
Normally, I would post an absurd price target but that seems completely impossible due to Jerome Powell’s comments about rising interest rates to curb inflation.
HPCO isn’t profitable yet and the company needs to raise cash to stay in business. With only 23 million shares outstanding, HPCO stock has a very low float and we could see a lot of price swings during the first couple of trading days.
It’s possible that HPCO could soar to as high as $30 based on hype but I expect early investors to lock in profits quickly. This is a good opportunity for some quick profits so I will buy the IPO on opening day and take profits as they come.
The stock market is bleeding red right now and I don’t want to be too greedy.
So I’m not putting a ton of money into HPCO to avoid losing my shirt. But I do own a few shares as a lotto ticket just in case HPCO soars to the moon.
Summary
HPCO could break out to $30 and soar 3 to 5x just like GCT did during its early IPO days.
The 6 month lockup period will help stabilize the share price and prevent a profit taking dump from insiders.
Don’t underestimate the power of a high flying IPO stock with lots of buyer interest.
Nobody thought HKD stock would hit $2,500 but it did.
What do you think? Leave a comment below and share your thoughts on HPCO stock.
