Shares of the Canadian pot giant Aphria (NASDAQ: APHA) are now under serious pressure. Shares of the company were down 13.4% as of 9:37 a.m. EDT Thursday morning.
What is it that scares investors today? Ahead of the opening bell, Aphria released its results for the first quarter of fiscal 2021. While the company recorded a net loss per share for the quarter that was slightly narrower than expected ($ 0.02 vs. 0, $ 03), Aphria misjudged the revenue for the quarter. Q1 revenue, in fact, is 8.7% lower than FactSet’s consensus estimate for the three-month period.
The Aphria Brains Trust has blamed this quarterly shortfall on the coronavirus pandemic. In particular, the company noted that first quarter distribution revenue fell by approximately C $ 17 million ($ 12.9 million) year over year due to a decrease in medical interventions. elective and in-person visits to physicians and pharmacies during the quarter due to the pandemic. . This is the silver lining of this otherwise disappointing earnings report.
Unfortunately, it’s not entirely clear when Aphria’s distribution revenues will get back on track. The COVID-19 pandemic is still slowing in-person visits to doctor’s offices and pharmacies around the world. In other words, investors probably shouldn’t expect this key area of Aphria’s business to rebound anytime soon.
Is Aphria’s stock a bad news buy? Like almost all marijuana companies, Aphria is currently facing an extremely difficult operating environment. As such, it might be a good idea to monitor this small cap cannabis stock from the safety of the sidelines for now.