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Can Cannabis Therapy Drive Aphria's (APHA) Q2 Earnings?

Zacks Equity Research

Aphria Inc. APHA is scheduled to report second-quarter fiscal 2020 results on Jan 14, 2020, after market close.

The company delivered a positive surprise of 100% in the first quarter of fiscal 2020. However, the company has a trailing four-quarter surprise of a negative of 25%, on average.

Let's take a look at how things are shaping up prior to this announcement.

Factors at Play

Over the past few quarters, Aphria has been consistently delivering a robust performance within its key business segment viz. cannabis therapy.

In the last-reported quarter, the company progressed well in terms of its medical and adult-use cannabis brands, consumer packaged goods and beverage offerings. Banking on the company’s consistent expansion in product line and focus on high-priority areas, the trend is likely to have continued in the second quarter.

Aphria Inc. Price and EPS Surprise

Aphria Inc. Price and EPS Surprise

Aphria Inc. price-eps-surprise | Aphria Inc. Quote

Lately, the company has been witnessing strong expansion of portfolio, which includes high-quality brands like Solei, RIFF, Good Supply, Broken Coast and Aphria Medical. This is expected to have fueled growth in the to-be-reported quarter.

Further, the company has been collaborating with a number of innovation partners like PAX, Manna Molecular Science and Rapid Dose Therapeutics. It has been strengthening its foothold in Canadian, German and Latin American markets. The company’s total domestic production capabilities in Canada expanded drastically in the last-reported quarter. We expect these developments to have contributed to the top line in the second quarter.

Which Way Are Q2 Estimates Treading?

For second-quarter fiscal 2020, the Zacks Consensus Estimate for total revenues of $100.9 million implies growth of 508.4% from the prior-year quarter’s reported figure. Also, the consensus estimate for loss is pegged at 2 cents.

Earnings Whispers

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. But this is not the case here as you will see below.

Earnings ESP: Aphria has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Aphria carries a Zacks Rank #3 (Hold).

Stocks Worth a Look

Here are a few medical stocks worth considering from the same space with the right mix of elements to surpass expectations this earnings season.

Intersect ENT XENT has an Earnings ESP of +8.54% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation EXAS has an Earnings ESP of +3.20% and a Zacks Rank of 1.

NuVasive NUVA has an Earnings ESP of +0.88% and a Zacks Rank of 3.

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