Aphria Inc. (NYSE:APHA) (TSX:APHA), one of the Canadian marijuana stocks, has a sizable cash position and should benefit from rising cannabis demand
SmallCapPower | March 30, 2020: BofA Securities Analyst Christopher Carey recently upgraded shares of Aphria Inc. (NYSE:APHA) (TSX:APHA), one of the Canadian cannabis stocks, from ‘Neutral’ to ‘Buy’ but lowered the price objective from US$8 to $5.
The analyst cited the Company’s significant cash and equivalents position of C$497.7 million (as of November 30, 2019), which represents about 40% of its market capitalization, in addition to rising cannabis demand, especially during this time of social distancing.
During its most recently-reported quarter (Q2 2019), Aphria recorded net revenue of $120.6 million, a 457% year-over-year increase, while Adjusted EBITDA from cannabis operations surged 155% quarter over quarter to $3.4 million.
Aphria is well positioned for international growth with operations in in Germany and South America. On January 14, 2020, the Company provided its outlook for 2020, saying it forecasts net revenue of about $575 million to $625 million, with Adjusted EBITDA of approximately $35 million to $42 million. Given the recent COVID-19 environment, however, investors should be prepared for a significant change in these numbers.
Aphria shares have bounced back about 69% from its recent low of US$1.95 to its current price of $3.29.
The Content contained on this page (including any facts, views, opinions, recommendations, description of, or references to, products or securities) made available by SmallCapPower/Ubika Research is for information purposes only and is not tailored to the needs or circumstances of any particular person. Any mention of a particular security is merely a general discussion of the merits and risks associated there with and is not to be used or construed as an offer to sell, a solicitation of an offer to buy, or an endorsement, recommendation, or sponsorship of any entity or security by SmallCapPower/Ubika Research. The Reader should apply his/her own judgment in making any use of any Content, including, without limitation, the use of any information contained therein as the basis for any conclusions. The Reader bears responsibility for his/her own investment research and decisions. Before making any investment decision, it is strongly recommended that you seek outside advice from a qualified investment advisor. SmallCapPower/Ubika Research does not provide or guarantee any financial, legal, tax, or accounting advice or advice regarding the suitability, profitability, or potential value of any particular investment, security, or information source. Ubika and/or its affiliates and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities and/or commodities and/or commodity futures contracts in certain underlying companies mentioned in this site and which may also be clients of Ubika’s affiliates. In such instances, Ubika and/or its affiliates and/or their respective officers, directors or employees will use all reasonable efforts to avoid engaging in activities that would lead to conflicts of interest and Ubika and/or its affiliates will use all reasonable efforts to comply with conflicts of interest disclosures and regulations to minimize the conflict.