Aphria (APH) (APHQF) reported its fiscal fourth quarter of 2018 earnings on August 1. It more than doubled its sales but reported a net quarterly loss. The quarter ended on May 31.
Its sales were 12 million Canadian dollars, up from 5.7 million Canadian dollars the previous year. Its gross margin contracted to 78.7% year-over-year, from 85.7%. It reported a net loss of 4.9 million Canadian dollars compared to a net loss of 2.5 million Canadian dollars a year ago.
PI Financial upgrades target
Investor sentiment toward the cannabis industry continues to be weak. During the day on August 1, Aphria sank 8.2%, closing at 10.60 Canadian dollars, while its peers Canopy Growth (WEED) and Aurora Cannabis (ACB) (ACBFF) fell 2.2% and 2.6%, respectively. Tilray (TLRY), which debuted on July 19, closed 2.2% higher that day. Year-to-date, Aphria has fallen 43%, while the benchmark index Horizons Marijuana Life Sciences ETF (HMMJ) has fallen 23.7%.
Despite Aphria reporting losses, PI Financial upgraded its price target for the stock to 28 Canadian dollars from 26 Canadian dollars. That target would give an upside of almost 164%. The stock has a “buy” rating.
During the quarter, Aphria’s cash cost per gram fell slightly to 0.95 Canadian dollars per gram from 0.96 Canadian dollars the previous quarter. However, its all-in cost of goods sold per gram increased to 1.60 Canadian dollars per gram sequentially, from 1.56 Canadian dollars. The company had a total production capacity of 35,000 kilograms as of the end of the quarter and is expected to increase to 255,000 kilograms by January 2019.
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