Aleafia stock continues to hit a new low despite Aleafia Health (TSX:ALEF) (OTCQX:ALEAF) reporting its first-ever profitable quarter in its third quarter.
Aleafia Turns Profitable
Although Aleafia Health managed to generate a profit in the third quarter, Aleafia stock has plunged by as much as 20% since announcing its results on November 12. In Q3 2019, the company’s revenue rose to $3.99 million, which reflects a sequential rise of 34%. Aleafia generated profits of $1.41 million, which is an excellent turnaround from the $8.68 million loss in the previous quarter.
While it is true that the achievement of profitability in the quarter is a significant positive for Aleafia stock investors, the profit didn't come as a surprise, considering the company had previously projected that it was going to show a profit. The third quarter has proven to be a vital one for Aleafia Health, since it was during this period that it completed a number of asset construction activities.
Aleafia stock is down 6% at $0.68 in Monday's trading session.
Aleafia Health has been involved in as many as three separate assets, and one can hope that these projects are going to have a positive effect on the company’s expansion in the near future. In addition to that, recreational cannabis sales rose by 53% from the previous quarter, while medical cannabis sales rose by 43%.
The company’s performance is quite clearly encouraging, yet investors were not entirely impressed by Aleafia’s performance in the third quarter. Aleafia stock price went down significantly on the day that it was announced. In this regard, it is worthwhile to add that Aleafia also asserted that, currently, it has sufficient cash to adequately take care of all “operating and capital activities.” So why aren't investors more impressed?
In an industry that is growing quickly, that is a significantly important announcement from the company and one that should come as a source of encouragement. Perhaps Aleafia's positive stock movement is yet to come. This is definitely a company to keep an eye on.
Aleafia stock has corrected 50% since the beginning of this year.
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