Aphria Stock Surges After Company’s Q4 Results Surprise Investors

Aphria stock

Aphria stock is soaring after the company released its latest results, showcasing impressive metrics that, effectively, put the company back in the black. Shares have grown a whopping 41% since and by the close yesterday were selling for $9.67 CAD on the TSX.

Let's check out the fuss with cannabis giant Aphria (TSX:APHA) (NYSE:APHA).

Aphria Stock Jumps on Unexpected Results

Aphria stock has traded predominantly sideways in recent weeks as it battled a volatile, uncertain, and downtrodden space. But on August 1, Aphria management announced its Q4 results and defied expectations.

The positive results did two very important things: firstly, they buoyed investors faith which, until now, was questionable since Aphria's late 2018 controversial fraud allegations.

Secondly, the company showed that in a predominantly beat-down cannabis market of late, there is a reason to be hopeful.

The optimism now felt has boosted Aphria stock considerably, handsomely rewarding investors who did not anticipate the surprising results.

The Q4 Results

The latest quarter was a strong one. According to SeekingAlpha:

"Net revenue, for instance, came in at C$128.57 million. This represents a significant increase over the C$73.58 million the company reported just one quarter earlier, and it was more than 10 times higher the C$12.03 million in net revenue the company generated the same quarter last year."

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But the most unexpected result from the company's Q4 report is that Aphria made a profit. Overall, profits came in at $15.76 million CAD. When we consider that Aphria made a loss of $4.99 million CAD in Q4 last year, the profit is extra significant.

The company's strong growth is, of course, attributable to cannabis legalization in Canada and in certain parts across the world. However, it is also due to the company's decisions and clever acquisitions that have led to its own organic growth. For example, the company produced 5,574kg of product in the latest quarter. This is double what was produced in the previous quarter.

And further, "a sizable chunk of its revenue ($99.2 million CAD) [came] from distribution related to its acquisition of CC Pharma and other distribution companies."

To add fuel to Aphria stock, management has strong expectations for its current fiscal year. So coupled with its recent performance, it's very hard to ignore this cannabis giant.

Has Aphria firmly put the past behind it and should we all take note?

The Takeaway

Aphria stock has suffered from the company's checkered past, but perhaps it is time to move on from the controversy and embrace these solid results. Will the company continue to maintain the trend? Time will tell, but for investors, it's looking promising.

What are your thoughts?

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