Today Rich reports on big news from Aphria Inc (TSX:APHA) (NYSE:APHA). While the cannabis industry continues to hobble into the fall, Aphria just posted a banner quarter, giving it the potential to raise the tide for other pot stocks.
“Aphria gets to be the hero right now, in a sector that has been obliterated,” explains Rich. “But Aphria is about to report record-breaking revenue.”
When the markets closed on Friday, APHA stock was worth $6.21. This morning it shot up 15% to $7.16 in the blink of an eye. Let’s take a look at the company’s position in the industry and what it means for investors.
Aphria’s First Quarter Results
For the three months ending August 30, 2019, Aphria posted net revenue of $126.1 million. This is an increase of 849% growth year-over-year prior, though a decrease of 2% from the prior quarter. Revenue from adult-use cannabis was $20 million this quarter, which is an increase of 8% from the prior quarter.
Adjusted EBITDA was just over $1 million, which puts the company in the green for the second consecutive quarter. This is exceptionally rare for the industry, considering the state of pot stocks these days.
It also ended its first quarter of 2020 with a strong balance sheet, including $464.3 million of cash, cash equivalents, and liquid marketable securities. Aphria says this funding will be used to support growth both in Canada and abroad.
Also of note, the company remains on track to establish an annual production capacity of 255,000 kgs. Last quarter, it sold nearly 5,000 kgs between the adult-use and medical markets, meaning it still has plenty of room to grow.
These results put the company in a very good position and, like Rich says, has the potential to raise the spirits of other companies in the cannabis space.
“Aphria’s up on the big news that they crushed their financial results,” says Rich. “And cannabis investors deserve some green.”
Effects on the Market and Aphria’s Future
The impressive reports from the company’s first-quarter 2020 signal a brighter possibility for pot stocks than what we’ve seen over the past half a year. Rich believes this could be the beginning of the resurrection.
“The markets are green, Aphria did what they are supposed to do,” he says. “They took over the number one spot in Canada for revenue, net income, and EBITDA. They’re the biggest and best in Canada right now.”
As Rich placed APHA stock #5 on his list of top pot stocks to watch last month, the company has been able to live up to—and even surpass—its expectations. But will this continue in the future?
In a conference call with investors, Aphria CEO Irwin Simon, says that his company was able to achieve a 12% share of the Canadian cannabis market in the last quarter. He credits this achievement to “brand awareness, nationwide distribution, and the high quality of Aprhia products.”
Simon expects this momentum to continue, and the company’s entry into new markets will help bolster future growth. Aphria will soon be launching cannabis edibles, beverages, topicals, extracts, and vape products. This will keep it competitive as “Cannabis 2.0” kicks the sector into a new gear.
What do you think? Is this a high point for Aphria, or will it continue leading the sector? If you have plans to buy or sell APHA stock, we’d love to hear about it in the comments below.
Featured image: DepositPhotos © bbbbar