Can opportunities lie in the space between reality and expectations? That is the question that those who still want to bet on the cannabis industry are asking in the wake of last week's earnings report from Aphria (NASDAQ :), (TSX :).
The Ontario-based cannabis grower has seen his stock price fall since reporting his first quarter earnings last Thursday. And here's the problem: The stock slide is coming from, despite fiscal results showing the sixth consecutive quarter. In fact, Aphria hit a record gross revenue, at C $ 69.6 million (US $ 52.74), up 23% from the previous quarter.
"Our financial results continue to envy the industry," said Carl Merton, Aphria's Chief Finance Officer.
But those results were still not enough to meet analyst forecasts.
Aphria reported net sales of C $ 145.7 million (US $ 110.41) for the last quarter ended August 31, 4% below the previous three-month period. The company blamed this dip on a drop in sales in the prosperous German medical cannabis market.
The marijuana grower posted EBITDA of C $ 10 million (US $ 7.58), but analysts were looking for C $ 11.9 million (US $ 9.02) in earnings before interest, taxes, depreciation and amortization .
"Our strong first quarter results reflect the continued robust growth and development of Aphria & # 39; s adult cannabis brands in Canada," said CEO Irwin Simon in a press release on Thursday.
Shares of Aphria fell more than 15% last Thursday, followed by another 2% loss on Friday to close at US $ 4.65 (C $ 6.13). The stock slightly reversed the trend yesterday, gaining 0.65% in the United States to close at US $ 4.68 and adding 0.82% in Canada to close at C $ 6.18. The stock has fallen by about 2% in the past year.
Aphria shares outperformed other Canadian-based pot stocks in the last quarter, gaining about 20%, surpassing others, such as Canopy Growth (NYSE :), which posted a gain of less than 2% on the share price saw, Aurora Cannabis (NYSE :), which registered a substantial 60% + loss in stock price and Tilray (NASDAQ :), which took 21%.
MedMen Continues Downward Trend
MedMen Enterprises (OTC :), (CSE 🙂 shares hit new lows last Friday after it closed its fourth quarter results. had published. The small US-based marijuana company saw its about 40% in the last quarter to $ 27.4 million.
The reasons for the decline were immense, including shutdowns in some states, COVID-19-related decline, and civil unrest in some US markets.
To add insult to injury, analysts at Canaccord Genuity reduced the company's price target to zero after the disclosure of the latest earnings report.
The MedMen stock fell slightly again yesterday to close at $ 0.1213. The stock has lost more than 88.5% in the past year.
Legalization in Canada Marks 2nd Anniversary
As market observers continue to speculate about when the US will legalize marijuana, legalization this month marked its second anniversary in Canada.
Today, there are 507 licensed cannabis producers in Canada, about 60 of which sell on the recreational market.
One of the biggest problems growers face in the Canadian market is oversupply, which means that many companies may face tough decisions in the future: How big will the write-offs be?
This fall will also be the first time cannabis grown outdoors will enter the market and increase supply.
