Newtopia Revenue Falls 33% in the First Quarter; Shares Jump 4%

Shares of Newtopia (NEWU) gained 4% on Friday morning, despite the company reporting lower revenues in the first quarter of 2021. Newtopia is a health technology company focused on the prevention of chronic diseases.

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Revenue for Q1 2021 came in at C$2.6 million, a decline of 33.3% from C$3.9 million in the prior-year quarter. Gross profit amounted to C$1.3 million for the first quarter, down from C$1.7 million in the same quarter a year ago. Gross profit margin was 50%, up from 43% in Q2 2020.

Meanwhile, Newtopia recorded an adjusted operating loss of C$1.6 million in the first three months of the year, compared to C$0.8 million in Q1 2020. The company had a cash balance of C$2.6 million at the end of the quarter.

Newtopia Founder & CEO Jeff Ruby said, “The pandemic has proven the importance of prevention as a means of protecting our global population. Specifically, we continue to see strong engagement levels for our whole-person care, and participant churn remains at historically low levels.”

“The first quarter marked a significant expansion of Newtopia’s health insurer focus and addressable market as we bring our proven disease prevention model to both the US and Canada for Medicare and provincial health customers, respectively. We anticipate a tsunami of chronic disease risk following COVID-19 and look forward to supporting our clients with a proven means of addressing this mounting issue,” added Ruby. (See Newtopia stock analysis on TipRanks)

Last month, Stifel analyst Justin Keywood reiterated a Buy rating on NEWU with a C$1.30 price target, for 168% upside potential.

Overall, NEWU scores a Moderate Buy consensus rating among analysts, based on 2 Buys. The average analyst price target of C$1.45 implies upside potential of 208.5% to current levels. Shares have lost more than one-third of their value year-to-date.