The Canadian marijuana cultivator Aphria (NASDAQ: APHA) satisfied investors with its latest earnings report, growing its net revenue by 16% from the same quarter last year. Between the company's ongoing efforts to drive down the cost of each gram of cannabis sold and maintain its rising gross profit margin, the company looks like it's on on a positive trajectory. But, like many other cannabis companies, Aphria is still struggling to post reliable profits despite scaling up its operations and launching new cannabis brands.
Is Aphria just another marijuana company that's doomed for unprofitability for years on end, much to the chagrin of its investors? Or is it a stock that's content to grow more slowly within its markets rather than risk overcommitment to the high fixed costs that have stunted its seemingly more ambitious competitors? In my view, Aphria still has some work to do before it's a must-buy, but so far, the company's cautious advancement means that it hasn't fallen victim to some of the problems plaguing its peers.
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Source Fool.com