Aphria stock is leading in the broader cannabis sector despite a sharp fall in the sector. Aphria Inc's (TSX:APHA) (NYSE:APHA) solid earnings have been supporting the stock this month. Let's do a quick analysis.
Major Drivers?
The past few months have been nothing short of disappointment for plenty of marijuana stocks, and overall, the optimism around the sector has pretty much evaporated among investors. However, even during such sector-wide slumps, some gems are almost always to be found, and in that regard, Aphria has emerged as the gem.
According to some analysts, it could well be the stock to buy for the second half of 2019, and it seems particularly attractive following the announcement of its earnings for the fourth quarter. After it announced its earnings for the quarter, Aphria stock price rose by as much as 30% on the same day, and it is increasingly looking like a stock that should be tracked.
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Earnings Boost
In its fourth-quarter results, the company posted positive net income, and in addition to that, it managed to post earnings even after EBITDA. That is a highly important milestone in the marijuana industry and makes Aphria one of the few companies in the marijuana space to have turned a profit. Considering the fact that many of its peers are currently not expected to make a profit, Aphria could well be the stock to own in the second half of 2019, if analysts are to be believed.
The revenues rose by a staggering 969% year-on-year to hit $128.6 million, while cannabis sales for the quarter were equally impressive. Cannabis sales rose by 158% to hit $18.5 million. Net income for the quarter stood at $15.8 million, while the income after EBITDA stood at $1.9 million. In the prior-year period, the company had made a loss of $12.9 million, and it is the fact that Aphria has managed to pose real profits that have now made the company such an attractive proposition for so many investors in the marijuana space.
The sector is expected to grow in the coming months, and it seems Aphria is one company that could well continue on its merry way.
Aphria stock is up over 30% so far in August.
Featured image: Canva
