Most anticipated quarter
The upcoming quarterly earnings results for cannabis companies (MJ) including Canopy Growth (WEED), Aurora Cannabis (ACB), and Tilray (TLRY) will be highly anticipated. The quarter will be the first full-quarter results for players since recreational cannabis was legalized in October. Companies are expected to experience significant YoY (year-over-year) revenue growth.
Aphria’s (APHA) revenues are expected to rise nearly 356% YoY in the second quarter ending in November to 38.8 million Canadian dollars from 8.5 million Canadian dollars in the same quarter last year. Aphria’s second-quarter results will only capture a few days of recreational cannabis sales.
The above chart indicates that analysts expect Aphria to capture a significant amount of sales from recreational cannabis. Will Aphria meet the target? We analyzed the earnings for the past five quarters. Aphria missed analysts’ estimates. If Aphria misses analysts’ estimate in the upcoming quarterly earnings release, the market might sell the stock to correct the company’s valuation based on the latest available sales figures.
Next, we’ll discuss how sales growth is expected to translate into margins.