Earnings season is coming up and one big marijuana company reporting its latest quarterly results this month is Aphria Inc (TSX:APHA)(NYSE:APHA). The Ontario-based pot producer will release its first quarter earnings report for fiscal 2021 next week, on October 15.
The company is coming off a tough finish to fiscal 2020 after incurring a fourth-quarter loss of $98.8 million to finish the year. Although its sales of $152.2 million were up more than 18% from the prior-year period, the company’s financials were weighed down by impairment charges of $64 million. Although it was the fifth straight quarter that the company reported a positive adjusted EBITDA, that wasn’t enough to get investors bullish on the stock’s recent results.
Aphria’s shares were up over $8 just before the company released its Q4 earnings and they’ve fallen sharply since then, finishing last week below $6. At a price-to-sales multiple of 2.7, Aphria’s not an expensive stock to own right now. And the company’s one of the few Canadian producers that’s consistently generated growth while also reporting a strong bottom line (its Q4 results were the exception, not the norm).
With pot sales continuing to climb in Canada amid the pandemic, Aphria’s likely to have another good quarter in Q1. As long as it doesn’t record impairment expenses, its bottom should be much stronger. The stock is trading around where it was back in late May and now could be a great time to buy shares of Aphria.
Year to date, the stock is down 13%, slightly worse than the TSX, which has fallen 5% thus far in 2020.
