Aphria (APHA) to Report Q1 Earnings: What’s in the Offing?

Aphria Inc.’s APHA fiscal first-quarter 2021 results are scheduled to release on Oct 15, after the closing bell. In the last reported quarter, the company delivered negative earnings surprise of 233.3%.

Q1 Estimates

The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $118.3 million, indicating an improvement of 23.8% from the year-ago reported figure. The consensus mark for the bottom line stands at a loss of 3 cents.

Factors to Note

Higher demand of medical and adult-use cannabis products is likely to have contributed to Aphria’s net revenues in the to-be-reported quarter. Per the fiscal fourth-quarter earnings call, the company witnessed an improvement of 184% with respect to adult-use cannabis revenues in fiscal 2020 courtesy of strength in its brands. This momentum is likely to have continued in first-quarter fiscal 2021 and might get reflected in the to-be-reported quarter’s results.

The company’s fiscal first-quarter performance is likely to have benefited from enhanced global team, brand-building activities, new facility and production abilities, and investment in new systems and technology.

Aphria Inc. Price and EPS Surprise

Aphria Inc. Price and EPS Surprise

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

In the fiscal fourth quarter, the company exhibited strength as a leading producer with both Aphria One and Aphria Diamond being fully licensed and operating at full capacity. Consequently, this may get reflected on the company’s fiscal first-quarter results.

Aphria possesses compelling brands for patients and consumers across broad demographics, which comprise five high-quality brands including Solei RIFF, Good Supply, Broken Coast and Aphria medical brand. These are likely to have favored the company’s fiscal first-quarter performance.

In August 2020, Aphria entered into a Strategic Supply Agreement with Canndoc Ltd., which is a subsidiary of InterCure Ltd., one of Israel’s largest and most established medical cannabis producers. This agreement enabled the company to continue expanding its medical cannabis brand globally.

During third-quarter fiscal 2020, the company received its European Union Good Manufacturing Practices (EU GMP) certification from the Malta Medicines Authority (“MMA”) at the company’s subsidiary, ARA – Avanti Rx Analytics and GMP annex at the Aphria One facility. This enabled Aphria to commence supply of medical cannabis throughout the European Union and bolstered its international export capabilities.

This is likely to have positively impacted the company’s performance in the to-be-reported quarter.

Here’s What the Quantitative Model Suggests

Per our proven model, a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. 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: The company carries a Zacks Rank #3.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Stryker Corporation SYK has an Earnings ESP of +2.24% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo Corporation MASI has an Earnings ESP of +10.71% and a Zacks Rank of 2.

DaVita Inc. DVA has an Earnings ESP of +2.89% and a Zacks Rank of 1.

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Aphria Inc. (APHA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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