March has been a sea of ups and downs for Aphria stock. A rocky few months have led to continued stock volatility but, despite this, CEO Irwin Simon is confident about one thing—that the company will hit $1 billion CAD in revenue by 2020.
In an interview with Bloomberg, the head of Aphria Inc (TSX:APHA) (NYSE:APHA) spoke of the company’s future prospects.
At the time of writing, APHA stock is selling for $9.20 USD, down 4.66% on the NYSE. The current price is the lowest value seen in March. However, Aphria stock hit above $10.42 either side of that low, so the month’s volatility is rather evident.
The company is still repairing the damage done by a short-seller report released in December. This report accused Aphria Inc of paying inflated prices for assets bought from insiders. The news, effectively, cut Aphria stock value in two and caused former CEO and chairman, Vic Neufeld, to retire.
Soon after, Green Growth Brands (CSE:GGB) announced its intention to launch a takeover offer and this went on to become a hostile bid. Aphria kicked off 2019 in dramatic fashion, and Aphria stock has yet to find its feet.
But Simon is confident he can turn Aphria’s fortune around. According to his chat with Bloomberg, “he intends to boost revenue from an estimated $209 million CAD in the fiscal year that ends May 31st, and achieve margins of at least 40%.”
It is a potential that can easily play out and if so Aphria stock could repair. Importantly, the company is ramping up its Canadian operations, which, at present, are only running at “about 18% of potential capacity.” With approved licenses and finalized constructions on the horizon, Aphria Inc should reach its total production capacity within the year.
At full peak capacity, this means an annual output of 255,000 kilograms of dried cannabis flower. Currently, Simon says it is only producing 35,000 kilos. Aphria stock is in line to reflect this massive jump in output.
Hostile Bid Takeover
Simon also spoke of the controversial Green Growth hostile bid takeover. The company rejected the bid in February as too low. Green Growth offered a price of approximately $7.40 CAD per Aphria stock, which is 40% less the stock’s current level of $12.23 CAD.
Moving forward, Aphria has plans to enter the US, leveraging contacts and experience Simon already has from his previous tenure. Simon is confident that Aphria will be able to bridge the gap between Canada and the US.
What do you think? Is Aphria stock on the rebound?
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