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Canadian cannabis company Hexo is launching an “Original Stash” cannabis line with prices that compete directly with the black market in an effort to hurt the black market. Yahoo Finance's Dan Roberts, Heidi Chung and Kristin Myers discuss on YFi AM.
Hexo launched Original Stash, a value cannabis brand. Hexo's CEO stated that the company intends to educate consumers and "disrupt the illicit market."
Aphria Inc. stock fell 8% Wednesday to pace decliners in the cannabis sector, a day after it reported earnings for its fiscal first quarter that showed a profit that was mostly due to a change in its stock price and shift in its stake in another company.
As the Canadian cannabis market undergoes growing pains, the industry stocks have taken a beating. The majority of the stocks in the sector are down over 50% as industry demand remains weak due to a lack of retail stores and a mounting flood of supply pressuring prices.Seaport Global analyst Brett Hundley recently reset expectations for the cannabis sector. Hundley is generally neutral on all of the Canadian stocks due to expectations of substantial revenue cuts with a more bullish view of the U.S. multi-state operator market.A major sign of his bearish view was the maintaining of a Buy rating on Aphria while lowering the price target from $13 to only $8. All of the other stocks in his coverage have Neutral ratings including updated numbers on Aurora Cannabis and HEXO after the later company recently slashed estimates and pulled guidance for FY20.We’ve delved into these three cannabis companies poised to struggle from low demand in Canada primarily due to a lack of retail stores all the way into 2021:Aurora Cannabis (ACB) Hundley makes big hits to the expectations for Aurora Cannabis in FY20 and FY21. The major basis for holding these large cannabis stocks was a concept of revenues reaching C$1 billion in the next year or so, but the analyst no longer thinks that is the case.In fact, Hundley is now far below consensus. The analyst reduced FY20 revenue estimates from C$589 million to only C$391 million. The new FY21 target was slashed by more than 50% with revenues dipping from C$992 million to only C$410 million. The forecast is that revenues only grow 5% during FY21.The resulting impact is that Aurora Cannabis doesn’t even reach profitability in FY21 despite the original guidance from the company of reaching that target in FQ4’19. Hundley now has the company producing an adjusted EBITDA loss of C$35 million in FY21.The stock still has a market valuation approaching $4 billion which is relatively expensive for a company with revenue estimates from Hundley of only $311 million in an out year. Stocks don’t usually maintain +10x sales valuations while losing money in a slow growth environment. Based on these estimates, Aurora Cannabis should have a Sell rating.TipRanks indicates Wall Street is evenly split between the bulls and the fence sitters on this cannabis stock. Out of 15 analysts polled in the last 3 months, 6 are bullish on Aurora stock, 6 remain sidelined, while 3 are bearish on the stock. Yet, consider that the 12-month average price target of $6.83 reflects healthy upside potential of nearly 90% from where the stock is currently trading; in other words, optimism circulates among analyst sentiment even amid apprehension. (See Aurora stock analysis on TipRanks)HEXO Corp. (HEXO)HEXO was a clear-cut case for estimate reductions after the company slashed last quarter estimates and pulled full year guidance. Hundley slashed revenue estimates for the next couple of years to factor in near zero growth.The analyst has HEXO only generating FY21 revenues of C$122 million, down from previous estimates of C$613 million. The company is now forecast to have breakeven adjusted EBITDA next fiscal year.The lack of guidance from HEXO and the quick departure of the CFO leave the numbers near impossible to model. Based on a market valuation of $660 million, the stock is far too expensive for the numbers outlined by Hundley.My expectations would be for the company to exceed these lowered estimates, but the stock isn’t touchable until more confidence exists in the ability of HEXO to operate in the current competitive market in Canada.The company needs to double or triple these revenue estimates from Hundley to make the stock a buy here. Investors have no reason to touch the stock here.Wall Street believes Hundley is smart to play it safe when it comes to the HEXO's prospects ahead, as TipRanks analytics reveal the stock as a Hold. Out of 10 analysts polled in the last 3 months, 7 remain cautious on HEXO stock, 2 are bullish, and one is bearish on the stock. However, the $4.46 price target suggests a potential of over 80% from the current share price. Most likely a result of the sudden tumble and analysts’ inability to turnaround new price targets so quickly. (See HEXO stock analysis on TipRanks)Aphria (APHA)Hundley was most bullish on Aphria in the Canadian cannabis sector despite a massive cut to the price target. The analyst had actually modeled revenues to C$131 million in the FQ1 just reported and the company didn’t even reach this target reporting C$126 million.A lot of the revenue miss came from a switch in the German operations to improve profitability, so the overall analyst estimates weren’t cut in an update. The other estimates by analyst Brett Hundley appear far too bearish as acknowledged by the analyst, yet the one comparison already in the market was too high.The new number already had Aphria seeing FY21 revenues dip to C$593 million, down from C$973 million. The analysts now has revenues estimates for FY21 at C$596 million so he has slightly more confidence in Aphria after the FQ1’20 report.Possibly most interesting was the company maintaining FY20 revenue guidance of at least C$650 million while Hundley reduced targets to only C$546 million. A wide gap now exists between where the analyst maintained estimates and the updated guidance from the company.The biggest positive for Aphria is the expectation of generating positive EBITDA as liquidity could become a major problem in the sector. The ability to generate cash from operations and over C$400 million on the balance sheet will help Aphria survive any further market pressure.The stock soared on the basis of maintaining revenue estimates for the year while Seaport is predicting limited growth despite the company having over 5 months of Cannabis 2.0 to contribute to the FY20 results. Aphria is only trading up to $5.50 on the market perception of positive results so Hundley still sees plenty of upside on the stock.If we step back and look at the bigger picture, we can see that overall the stock has a ‘Moderate Buy’ analyst consensus rating. In the last three months, the stock has received 5 "buy" ratings and just one "hold" and one "Sell" ratings. With an average analyst price target of $8.20, analysts are projecting upside potential of 64% from the current share price. (See Aphria stock analysis on TipRanks)
Two Pennsylvania senators introduced a comprehensive marijuana legalization bill on Tuesday. Senator Daylin Leach and Sharif Street introduced the bill.
Aphria Inc.’s profits are about the paper, not the pot. The Canadian cannabis producer reported its second consecutive quarter of profitability early Tuesday, posting net income of C$16.4 million on sales of C$126.1 million. U.S.-traded shares of Aphria (APHA)(CA:APHA) closed Tuesday’s regular session with a 24% gain, but had previously fallen just over 6% in the quarter it reported Tuesday.
Brexit News Changing By the Hour As Clock Ticks Down, Again Brexit deal, or no Brexit deal, that is the question. Nobody knows the answer, but the news stories just keep coming, with every new one contradicting the last. The latest is that there is no deal, as assessments from unspecified political experts are “gloomy”. […]The post Market Morning: Brexit Back'n'Forth, Carrie Lam Booed Off Stage, Buffett Wants BofA, Balkman Blunders appeared first on Market Exclusive.
With cannabis stocks beaten down in the last few months, the big rally by Aphria (APHA) following the release of FQ1 numbers is a major relief rally. The numbers weren’t exactly spectacular for a cannabis sector expected to generate substantial revenue growth, yet the stock didn’t deserve the 35% decline since the September peak above $7.Flat To Down QuarterThe quarterly numbers just weren’t that impressive. Aphria reported revenues down 2% from the prior quarter as a change in business strategy in Germany caused a reduction in sales.In total, FQ1 net sales of C$126.1 million were down from C$128.6 million in the prior quarter. The key adjusted EBITDA figure was C$1.0 million, up from C$0.2 million in the prior quarter. The adjusted EBITDA from the important cannabis operations was actually down about C$0.5 million from C$1.8 million in the prior quarter.Due to the purchase of the cannabis distribution system in Germany, the company has a confusing set of financials. CC Pharma generates most of the revenues while the Canadian cannabis operations generates all of the positive EBITDA and most of the gross profits.Reaffirming GuidanceAfter the debacle at HEXO, the market was relieved to see Aphria maintain full year guidance. The company forecasts net revenues of C$650 million to C$700 million with distribution revenue representing slightly above half of total net revenue. The cannabis company maintained adjusted EBITDA of ~C$88 million to C$95 million.The key to FY20 guidance is the expectation to drastically expanded cannabis operations revenues. One might question if that actually can occur with how weak Canadian sales have been over the Summer. Aphria needs to boost the cannabis operations sales from C$30 million in FQ1 to end the year closer to C$100 million on a quarterly basis.In FQ1, Aphria only sold 5,969 kg of cannabis, up about 10% from the prior quarter. The company remains on track to up production to 255,000 kg when all facilities are fully licensed and operational.The goal is to increase quarterly capacity 10-fold to 63,750 kg. No doubt, this amount of capacity growth will generate revenue growth for the division with about 50% margin already, but the question remains how Canada will absorb all of this additional capacity.In the quarter, Aphria saw average retail selling prices of both medical and recreational cannabis remain relatively stable. In fact, the company saw recreational prices increase to C$6.02 (before excise taxes) sequentially while just about every other cannabis player in Canada has seen pricing pressure. Major pricing pressure in the December quarter could reduce any benefit of higher production output.Consensus Verdict The rest of Wall Street largely buys into what this cannabis player has to offer, as TipRanks analytics reveal APHA as a Buy. Out of 5 analysts polled in the last 3 months, 3 are bullish on Aphria stock while one remains neutral and one is bearish. With a return potential of 47%, the stock’s consensus target price stands at $7.95. (See Aphria stock analysis on TipRanks)One of these analysts, Jefferies' Owen Bennett, reiterated a "buy" rating on APHA stock today, along with C$11.00 price target. Bennett noted, "We highlight Aphria as one of our three top picks, with strong execution, profitability, and possible near-term positive newsflow around the US all helping. Today's update supports our bullishness. On execution, it continues to take market share in Canada and also reiterated its sales and EBITDA outlook. The confirmation of sales should be seen as a big positive given that there have been concerns around wider industry pressures, with a wave of recent street downgrades [...] We continue to believe Aphria can be one of a few global leaders long term, yet it remains one of the cheapest names across our coverage and at a significant discount to the likes of Canopy, Tilray, Aurora and Cronos." (To watch Bennett's track record, click here)TakeawayThe key investor takeaway is that Aphria has now proven to the market that the management and operational concerns are in the past. The company continues to produce solid numbers in a competitive cannabis market.With about 252 million shares outstanding, the stock has a current market cap of ~$1.35 billion. After converting the adjusted EBITDA target to ~$70 million in US dollars, the stock trades at about 20x the forecast. Aphria is reasonably valued after the rally, though the company has a long ways to go in order to prove all of this cannabis production increase can be turned into positive numbers.To find more good ideas for cannabis stocks trading at fair value or better, Visit TipRanks’ Best Stocks to Buy, a newly launched feature that unites all of TipRanks’ equity insights.
Canadian cannabis producer Aphria reported a fiscal Q1 profit and a big jump in revenue. Aphria stock soared. Other beaten-down marijuana stocks rose.
Aphria Inc. (APHA) delivered earnings and revenue surprises of 100.00% and -7.05%, respectively, for the quarter ended August 2019. Do the numbers hold clues to what lies ahead for the stock?
With the exception of Goldman Sachs Group Inc (NYSE: GS), the Street was taking a liking to the reports from the financial sector during the premarket session, and Aphria Inc (NYSE: APHA) has given a boost to much-maligned marijuana sector. JPMorgan Chase & Co. (NYSE: JPM), which has been the best of breed in the sector for quite some time, did not disappoint investors and delivered a strong third-quarter print. Both Wells Fargo & Co (NYSE: WFC) and Citigroup Inc (NYSE: C) are trading higher after their earnings reports, but both remain quite a distance from all-time-highs.
With a boost from Aphria’s (APHA) impressive first-quarter earnings, cannabis stocks and ETFs were trading higher today. Let's take a closer look.
(Bloomberg) -- Aphria Inc. became the first large pot producer to report a second consecutive profitable quarter Tuesday, sending its stock up as much as 18%.The company said it earned C$16.4 million on revenue of C$126.1 million in the quarter ended Aug. 31, a slight decline from the prior period. It also reiterated its outlook for fiscal 2020, which calls for revenue of C$650 million to C$700 million and adjusted Ebitda of C$88 million to C$95 million.Notably, revenue from recreational cannabis sales rose 8% quarter-over-quarter to C$20 million. The increase comes as other companies like Canopy Growth Corp. and Aurora Cannabis Inc. have reported sales declines or warned of an impending slowdown. Hexo Corp. withdrew its guidance for fiscal 2020 last week, citing slower-than-expected store openings, a delay in government approval for new products and early signs of pricing pressure. Other companies are still having trouble supplying the market.Aphria’s interim Chief Executive Officer Irwin Simon said he hasn’t seen a slowdown in sales or pricing pressure.“I always thought there was something out there called supply and demand,” Simon said in a phone interview. “If there’s still supply issues, I’m not sure how the pricing pressure is being applied against companies that are having issues supplying.”Aphria also took market share from its competitors in the quarter. In Ontario, Canada’s most populous province, it gained four points to 12% of the market, Simon said.Aphria’s stock increase was the largest since its last quarterly report on Aug. 2. Prior to Tuesday, the stock had lost about 16% since the beginning of the month amid broader weakness in the pot sector.“We believe the reaction is due to industry sentiment (and valuations) near all-time lows, making an in-line quarter very well received by many industry investors,” CIBC analyst John Zamparo said in a note.Other cannabis producers also joined in the gains, with the ETFMG Alternative Harvest ETF adding 6.9%. Tilray Inc. rose 8.9%, Cronos Group Inc. gained 7.8% and Organigram Holdings Inc. jumped 16%.Aphria has posted a remarkable turnaround since late last year, when it was the target of short sellers who accused it of paying inflated prices to buy Latin American assets from insiders. That resulted in the ousting of Chief Executive Officer Vic Neufeld, who was replaced on an interim basis by Simon, former CEO of Hain Celestial Group Inc.Simon said in August that he was “absolutely” interested in acquiring assets from CannTrust Holdings Inc., which had its license suspended following a regulatory breach. He was less definitive on Tuesday.“There’s a big focus today at Aphria on our medical cannabis business, and if I don’t have to go buy assets and those patients are there and I can build it on my own, that’s a better place to be,” he said.(Updates with CEO comments from interview.)To contact the reporter on this story: Kristine Owram in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Brad Olesen at email@example.com, Will Daley, Richard RichtmyerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The trading in Tilray (NASDAQ:TLRY) stock has been jaw-dropping. Tilray stock went public just last July -- the first cannabis company to list on a major U.S. exchange. The IPO price was $17. Within three months, the stock had closed at $214, with a brief intra-day run to $300.Source: Jarretera / Shutterstock.com Thirteen months later, those gains are nearly all gone. Tilray stock closed Monday just above $20. To be sure, cannabis stocks have seen volatility over the past year, and nearly all of them have declined sharply of late. But none have had quite the highs -- or the pullback -- of TLRY.The irony is that I still think Tilray stock is one of the more intriguing stocks in the category. The bubble last year -- and it was a bubble -- has given Tilray the reputation of a fly-by-night operator, or even something close to a "pump and dump." That's not the case.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTilray's long-term strategy, which is to focus not on production, but on products, makes some sense. And as I wrote after Tilray earnings in August, investors' sudden interest in profitability is odd. Even Tilray CEO Brendan Kennedy noted it after the second-quarter release. * 10 Hot Stocks Staging Huge Reversals In fact, I called out TLRY as one of 10 mid-cap stocks to buy in late August. But as I noted at the time, patience was advised: The Tilray stock chart looked like a falling knife.It still does -- and that patience still is advised. TLRY, perhaps more than any other pot stock, shows just how much sentiment has changed and how much it will take to reverse it. What Will It Take for TLRY Stock to Rally?Over the last three months, TLRY stock has lost more than half of its value. And yet, in the context of cannabis investor expectations as recently as this summer, the news hardly seems all that grim.Q2 earnings were fine. Yes, Tilray missed analyst expectations for profitability. But profits are not the endgame right now -- positioning for cannabis growth is. Tilray's solid revenue growth is up 371% year-over-year and nicely ahead of analyst estimates. That seemed like a step in the right direction. Investors agreed with that at the start of the year, when pot stocks like TLRY, Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB) were rallying. That's true no more.Indeed, off what was at worst a decent quarter, Tilray stock fell 35% in four sessions. A big whiff at Canopy, which pressured the sector, certainly didn't help. But in no way should the report have driven a 35% decline. And I'd argue that even six months earlier, the same report may well have been perceived as positive, not negative. Even Aphria (NYSE:APHA) has continued to decline despite what was clearly a blowout report. It's hard to imagine what kind of earnings beat it would take to truly change investor sentiment. Political Help, Right?The last time cannabis stocks rallied was late last year. And a key catalyst for the rally was the passage of the Farm Bill, which legalized hemp in the U.S.That new law was seen as a potential first step toward legalization in the U.S. -- an obviously enormous opportunity for legal cannabis producers. And so the rally, admittedly off lows driven in part by a market-wide selloff, seemed to make some sense.Late last month, the SAFE Banking Act passed the U.S. House of Representatives. The act allowed banks to legally work with cannabis companies in states where marijuana was legalized. The impact on cannabis stocks was minimal. TLRY stock gained 2.7% that day and the gains were erased in less than two sessions.To be sure, the SAFE Banking Act isn't necessarily going to become law. Indeed, it's unlikely to pass the Republican-controlled Senate. But, here too, it's not hard to imagine the reaction being very different last year or even earlier this year. It's a step in the right direction for the sector, seemingly. But investors don't care. Anheuser-Busch Can't Even Help Tilray StockTilray announced that its joint venture with Anheuser-Busch InBev (NYSE:BUD) would commercialize non-alcoholic CBD beverages in Canada.In 2018, such an announcement would have sent Tilray stock soaring. On Friday, the day following the after-close announcement, TLRY rose 1.5%. It had declined over 13% the day before.Perhaps nothing for Tilray stock this year -- and maybe nothing for the sector as a whole -- further shows what a shift in sentiment there's been in the past year or so. Tilray is taking a big step forward with a big-time partner toward a legitimate opportunity. And investors seemingly could not care less.That's a hugely dangerous problem for Tilray in the short term. But combined with the reputational impact of last year's TLRY bubble, it's also why the stock still seems intriguing -- at some point. But there's no need yet to try and figure out when that point might be.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Hot Stocks Staging Huge Reversals * 7 Under-The-Radar Growth Stocks That Could Benefit New Investors * 5 Excellent High-Yield Dividend Stocks to Buy The post Plunging Tilray Stock Shows Just How Much Sentiment Has Changed appeared first on InvestorPlace.
Organto Foods (TSX-V: OGO) (OTC: OGOFF) has signed an agreement to sell its Colombian subsidiary Medicannabis S.A.S. to Xebra Brands for a combination of shares, cash and forgiveness of debt. Medicannabis is focused on the development of medicinal cannabis. Canntab Therapeutics (CSE: PILL.CN) (OTCQX: CTABF) (FRA: TBF1.F), an innovator in cannabinoid and terpene blends in hard pill form for […]The post Cannabis Stock News Daily Roundup October 15 appeared first on Market Exclusive.
Today, Aphria (APHA) reported its first-quarter earnings for fiscal 2020, which ended on August 31. The company reported revenues of 126.1 Canadian dollars.
Oct 15 (Reuters) - Canada's main stock index rose at open on Tuesday, led by gains in shares of cannabis company Aphria and miner Wesdome Gold following upbeat quarterly results. * At 9:30 a.m.
The pot grower reported a per-share profit for its fiscal first quarter, while Wall Street had expected a loss.
Aphria Inc (TSX: APHA) (NYSE: APHA ) reported net first-quarter revenue of CA$126.1 million ($95.3 million) Tuesday, up 849% from the same quarter in 2018. During the first quarter of fiscal 2020, the ...
Aphria (APHA), a Canada-based global cannabis company, will report its results for the first quarter of fiscal 2020 today after the market opens.