Aphria stock rose nicely last month. After falling to as low as $5.02/share, Aphria stock rallied in early August on strong earnings. APHA has since declined from $7.45/share to around $6.95/share.
At its current valuation, APHA stock trades at a discount to Aurora Cannabis (NYSE:ACB) and Canopy Growth (NYSE:CGC). But does this make Aphria stock a value play? APHA has a tarnished reputation. But the company’s recent earnings success could be a signal that Aphria’s future prospects remain strong.
Let’s take a closer look at APHA stock, and see if now’s the time to buy.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Like Aurora, Aphria has focused on the medical side of cannabis. The medical space is less “cool” than the recreational side. But it offers a more stable opportunity. Similar to Aurora, Aphria has focused its efforts on international markets. With the Canadian market still suffering a supply glut, geographic diversification is a smart move.
APHA has had the most success in Europe, particularly Germany, and in Latin America. After acquiring CC Pharma, Aphria is now one of three companies with a cultivation license in Germany. With a solid foothold in that market, Aphria is doubling down on that market.
Overall revenues for the quarter that ended in May were C$128.6M. That was up from C$73.6M in the prior quarter. Gross profits doubled from C$17.3M to C$36M.
After these improvements, APHA has high hopes for fiscal 2020. In FY20, the company anticipates net revenue of between C$650m-C$700m. Its guidance calls for adjusted EBITDA of between C$88m and C$95m. That means APHA is getting close to profitability.
But APHA stock has many red flags. As InvestorPlace contributor Josh Enomoto detailed on August 15, the company suffered a big scandal, as a short seller accused the company’ top executives of looking to personally profit from acquisitions. As a result, the company’s CEO and co-founder were ousted. The company’s use of figures such as “Adjusted EBITDA” and other non-GAAP figures is also worrisome. True profitability could be many years off for APHA.
With this in mind, investors may want to assess the company’s projections with a critical eye. But has this scandal created a buying opportunity? Let’s see how the valuation of Aphria stock stacks up to its peers.
When comparing marijuana stocks, I typically use Enterprise Value/Sales ratio. For now, that remains the most clear valuation metric. Based on this ratio, Aphria stock is undervalued. The company’s current EV/Sales ratio is 9.5, representing a sharp discount compared to its peers:
Aurora Cannabis: EV/Sales of 46.1
Canopy Growth: EV/Sales of 36.2
Cronos (NASDAQ:CRON): EV/Sales of 98.7
Hexo (NYSE:HEXO): EV/Sales of 40
But this discount could be the canary in the coal mine. The company has had asset write-downs in the past, and APHA may have to write down its $500m acquisition of Nuuvera . Given that the market cap of Aphria stock is $1.7 billion, that is a serious impairment charge. And as with other pot stocks, the dilution of APHA stock is a concern. To fund its operations, APHA issued convertible debentures. These debentures are convertible into 37.3M shares of Aphria stock. This dilution could minimize the gains of Aphria stock.
Aphria stock sells at a discount to its peers. But the company’s tarnished reputation is a concern. Be cautious before buying into the company’s elevator pitch. However, the company is focused on a more stable market, medical marijuana, than some of its peers. Moreover, tts success in Germany has given it a blueprint for success. That success could be duplicated in other European markets.
The cannabis industry remains overvalued. Negative investor sentiment could push marijuana stocks down further. It is tough to call a bottom. But marijuana stocks could soon be selling at more reasonable valuations. If that scenario unfolds, APHA may become a solid play. Keep APHA on your radar, but be cautious about buying Aphria stock.
As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities.
Aphria 股票上个月上涨很好。在跌至每股5.02美元的低点后， Aphria 股价在8月初因强劲盈利而上涨。此后， APHA 股价从7.45美元/股跌至约6.95美元/股。
在当前估值时， APHA 股票的交易价格低于奥罗拉（Aurora） Cannabis （ NYSE ： ACB ）和 Canopy Growth （ NYSE ： CGC ）。但这会让 Aphria 股票成为一种价值游戏吗？APHA 名誉受损。但该公司近期的盈利成功可能表明， Aphria 的未来前景依然强劲。
让我们更仔细地看一看 APHA 股票，看看现在是时候买了。
像奥罗拉（Aurora）一样， Aphria 专注于大麻的医疗方面。医疗空间比娱乐场所更少“凉爽”。但它提供了一个更稳定的机会。与奥罗拉（Aurora）类似， Aphria 也把精力集中在国际市场上。由于加拿大市场仍然供过于求，地理多样化是一个明智的举措。
APHA 在欧洲，特别是德国和拉丁美洲取得了最大的成功。在收购了 CC Pharma 后， Aphria 现在是在德国拥有种植许可证的三家公司之一。凭借在该市场上的稳固立足点， Aphria 在该市场上的份额翻了一番。
在这些改进之后， APHA 对2020财政年度寄予厚望。在2010财年，该公司预计净收入在6.5亿至7亿加元之间。其指导意见要求调整后 EBITDA 在8800万至9500万加元之间。这意味着 APHA 正在接近盈利能力。
但 APHA 股票有许多红旗。正如 InvestorPlace 的出资人 JoshEnomoto 在8月15日详述的那样，该公司遭遇了一场大丑闻，一名卖空者指责该公司的高管希望从收购中获得个人利润。结果，该公司的首席执行官和联合创始人被免职。该公司使用“调整后 EBITDA ”等数据以及其他非非一般公认会计原则（non-GAAP）数据也令人担忧。APHA 真正的盈利能力可能需要多年时间。
考虑到这一点，投资者可能希望以关键眼光评估该公司的预测。但这桩丑闻是否创造了购买机会？让我们看一看 Aphria 股票的估值如何与同行相仿。
比较大麻库存时，我通常使用企业价值/销售比率。目前，这仍然是最明确的估值指标。基于这个比率， Aphria 股票被低估了。公司目前的 EV /销售比率为9.5，与同行相比有大幅折扣：
奥罗拉（Aurora） Cannabis : EV /销售46.1
克罗诺斯（纳斯达克代码： CRON ）： EV / Sales 为98.7
Hexo ( NYSE : HEXO ): EV / Sales 40
但这种折扣可能是煤矿里的金丝雀。该公司过去曾进行过资产减记， APHA 可能不得不减记5亿美元收购 Nuuvela 的交易。鉴于 Aphria 股票的市值为17亿美元，这是一项严重的减值支出。与其他罐装股票一样， APHA 股票的稀释也是一个值得关注的问题。为了为其运作提供资金， APHA 发行了可转换债券。这些债券可转换为3730万股 Aphria 股票。这种稀释可以最大限度地减少 Aphria 股票的收益。
Aphria 股票的价格低于同行。但该公司名誉受损令人担忧。在购买该公司的电梯前要小心。然而，与一些同行相比，该公司专注于更稳定的医用大麻市场。此外， tts 在德国的成功为它提供了成功的蓝图。这种成功可能在其他欧洲市场复制。
大麻产业仍然被高估。负面的投资者情绪可能会进一步推低大麻股票。很难称之为底部。但大麻股票很快可能会以更合理的估值出售。如果这种情况发生， APHA 可能成为一个坚实的发挥。保持 APHA 在你的雷达，但谨慎购买 Aphria 股票。
截至本文撰写之日， Thomas Niel 未持有上述任何证券的头寸。