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Will Brand Building Efforts Aid Aphria (APHA) in Q3 Earnings?
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Aphria Inc.’s cannabis business has been gaining momentum on its continued focus on growth priorities, promising highest returns.
We expect the strength to get reflected in the company’s third-quarter fiscal 2020 results, scheduled for release on Apr 15, before market open.
In the last reported quarter, the company registered a loss of 2 cents per share, in line with the Zacks Consensus Estimate.
Let’s take a look at how things are shaping up prior to the announcement.
Key Drivers in Q3
Shares of the company have been on a declining trend for the past three months like most stocks in the industry. The coronavirus outbreak has massively disrupted the global supply chain. Hence, Aphria, which has a strong base in Canada, Germany and South America, is expected to have seen a significant fall in its quarterly revenues.
However, Aphria has been making efforts to optimally utilize greenhouse space, cultivation expertise, extraction capacity, automation technology, differentiated brands, product innovation and raw materials. The company has been on track to add capabilities to its portfolio in Canada from gains in its production scale, in turn, helping it build international distribution channels for medical and adult-use cannabis, thus boosting the top line. The company has been strengthening the foothold in Germany, thus adding to its revenues.
Aphria received European Union Good Manufacturing Practices (“EU GMP”) certification from the Malta Medicines Authority as an active substance manufacturer at the company’s Ontario facility in January. Aphria previously received the EU GMP for its subsidiary, ARA – Avanti Rx Analytics. Based on the certifications, the company expected to witness strength in its international export capabilities throughout the EU in the second half of the fiscal year. This is likely to get reflected in its third-quarter results. Till the COVID-19 led devastation took its peak in Europe from early February, the certifications are likely to have positively contributed to the company’s international revenues by accelerating sales as well as profitability, thus boosting the overall top line.
At the Aphria One facility, the company is currently fully licensed and has nearly 600,000 plants. Aphria has also been strengthening its focus on its five quality brands, namely Solei, RIFF, Good Supply, Broken Coast and Aphria to improve brand positioning and innovation to drive growth. This is likely to have contributed significantly to the company’s top line.
Meanwhile, the Zacks Consensus Estimate for third-quarter fiscal 2020 adjusted loss of 4 cents suggests an improvement of 73.3% from the year-ago reported figure. The consensus mark for revenues is currently pegged at $95.7 million.
What the Quantitative Model Predicts
Per our proven model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. But this is not the case here as you will see below.
Earnings ESP: Aphria has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +1.03% and it sports a Zacks Rank of 1 at present.
DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +143.90% and is a Zacks #2 Ranked stock.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will Brand Building Efforts Aid Aphria (APHA) in Q3 Earnings?
Aphria Inc.’s cannabis business has been gaining momentum on its continued focus on growth priorities, promising highest returns.
We expect the strength to get reflected in the company’s third-quarter fiscal 2020 results, scheduled for release on Apr 15, before market open.
In the last reported quarter, the company registered a loss of 2 cents per share, in line with the Zacks Consensus Estimate.
Let’s take a look at how things are shaping up prior to the announcement.
Key Drivers in Q3
Shares of the company have been on a declining trend for the past three months like most stocks in the industry. The coronavirus outbreak has massively disrupted the global supply chain. Hence, Aphria, which has a strong base in Canada, Germany and South America, is expected to have seen a significant fall in its quarterly revenues.
However, Aphria has been making efforts to optimally utilize greenhouse space, cultivation expertise, extraction capacity, automation technology, differentiated brands, product innovation and raw materials. The company has been on track to add capabilities to its portfolio in Canada from gains in its production scale, in turn, helping it build international distribution channels for medical and adult-use cannabis, thus boosting the top line. The company has been strengthening the foothold in Germany, thus adding to its revenues.
Aphria Inc. Price and EPS Surprise
Aphria Inc. price-eps-surprise | Aphria Inc. Quote
Aphria received European Union Good Manufacturing Practices (“EU GMP”) certification from the Malta Medicines Authority as an active substance manufacturer at the company’s Ontario facility in January. Aphria previously received the EU GMP for its subsidiary, ARA – Avanti Rx Analytics. Based on the certifications, the company expected to witness strength in its international export capabilities throughout the EU in the second half of the fiscal year. This is likely to get reflected in its third-quarter results. Till the COVID-19 led devastation took its peak in Europe from early February, the certifications are likely to have positively contributed to the company’s international revenues by accelerating sales as well as profitability, thus boosting the overall top line.
At the Aphria One facility, the company is currently fully licensed and has nearly 600,000 plants. Aphria has also been strengthening its focus on its five quality brands, namely Solei, RIFF, Good Supply, Broken Coast and Aphria to improve brand positioning and innovation to drive growth. This is likely to have contributed significantly to the company’s top line.
Meanwhile, the Zacks Consensus Estimate for third-quarter fiscal 2020 adjusted loss of 4 cents suggests an improvement of 73.3% from the year-ago reported figure. The consensus mark for revenues is currently pegged at $95.7 million.
What the Quantitative Model Predicts
Per our proven model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. But this is not the case here as you will see below.
Earnings ESP: Aphria has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Chemed Corporation (CHE - Free Report) currently has an Earnings ESP of +1.78% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +1.03% and it sports a Zacks Rank of 1 at present.
DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +143.90% and is a Zacks #2 Ranked stock.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>