Is Numinus (TSX:NUMI) a psychedelic stock under 50 cents to buy?

Growth investors looking for cheap stocks could explore this under-50-cents stock, Numinus Wellness (TSX: NUMI).

Numinus Wellness is a Canadian company focused on providing psychedelic-based therapeutic solutions for mental wellbeing. The C$ 63-million market cap company manages a clinical network that offers psychedelic-assisted therapies to patients diagnosed with depression, anxiety, trauma, pain and substance use.

The NUMI stock plunged by almost two per cent to C$ 0.26 on Thursday, July 21. However, this psychedelic stock rose by nearly 11 per cent this week. So, let us look at Numinus' financial and stock performance.

Numinus Wellness Inc (TSX: NUMI)’s Q3 2022 financial results

The penny market cap company reported revenue growth of 31.8 per cent to C$ 0.74 million in Q3 FY2022 compared to the same quarter of 2021. The psychedelic company said this revenue surge was mainly driven by the acquisition of the Mindspace and Neurology Centre of Toronto.

Numinus noted an improvement in gross profit to C$ 0.18 million in the latest quarter, relatively higher from a gross loss of C$ 0.01 million in the same quarter a year ago.

The mental health company pointed out that corporate development and legal expenses associated with the Novamind acquisition partially contributed to a loss of C$ 7 million in the third quarter of 2022, relatively higher than a loss of C$ 4.8 million in Q3 2021.

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Numinus stock's performance

The NUMI stock has lost almost 51 per cent in value year-to-date (YTD). However, the psychedelic stock also noted a rise of over six per cent month-to-date (MTD). Stocks of Numinus were up by roughly 16 per cent from a 52-week low of C$ 0.225 (July 14). According to Refinitiv information, the NUMI stock saw an increasing Relative Strength Index (RSI) of 44.55, pointing to a moderate trend, on July 21.

Bottom line

Though Numinus Wellness like other penny stocks is risky, its debt-to-equity (D/E) ratio of 0.12, which may mean lower financial risk compared to stocks having a D/E ratio of more than one. Investors focused on benefiting from the psychedelic market could look into this TSX-listed psychedelic stock priced under 50 cents. However, as Numinus has a low market capitalization, investors should bear in mind the risk associated with penny investments.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.