Aphria Stock Gains the Most in 2019 After Profitable Quarter

Aphria stock

Aphria Inc (TSX:APHA) (NYSE:APHA) is providing a big relief to cannabis stock traders as Aphria stock is gaining over 30% and boosting the confidence in the recently beaten-down pot sector. Investors are cheering an unexpected profitable quarter from Aphria.

Big Boost for Aphria Stock

While it is true that the marijuana sector is going through a lot of pain currently and many stocks have lost a lot in value over the past few months, some cannabis stocks have managed to buck the trend. One of those companies is Aphria, which soared significantly in Friday's trading following the announcement of its Q4 2019 results. In its fourth-quarter financial results, Aphria performed admirably and managed to beat market expectations comfortably, thereby triggering the rise in its stock price. The company’s revenues soared to almost $129 CAD million, as opposed to analysts’ estimates of $98 million CAD, and reflected a staggering 10-fold year-on-year rise.

In early trading, Aphria stock rose by as much as 36% at $9.40 on the TSX, and it is certainly going to be watched by investors over the coming days.

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Solid Outlook

The company also provided its projections for 2020. It has projected revenues between $650 million CAD and $700 million CAD for the year. EBITDA has been pegged between $88 million CAD and $95 million CAD. Those are robust projections, and the reaction of the market was not surprising in the least.

Despite the impressive quarterly result and the optimism surrounding the stock, the actual revenues that the company managed to generate from cannabis are low. Out of the near $129 million revenues, only around $29 million was accounted for by cannabis, and the rest of it was largely generated by its distribution businesses. The bulk of those revenues came from what was generated by CC Pharma, a German distributor that had been taken over by Aphria in January this year.

While it is without a doubt an excellent performance from the company, it cannot be denied that its core business did not make the biggest contribution and rather the bulk of it came through a strategic acquisition.

After today's big rally, Aphria stock is up over 20% for 2019.

>> Read More Aphria News

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