Zacks Research Downgrades Aurora Cannabis (NASDAQ:ACB) to Hold

Key Points

• Zacks Research downgraded Aurora Cannabis from “strong buy” to “hold.” The broader analyst consensus is also “hold,” with one buy, two hold, and one sell rating.
• Aurora shares opened at $4.59 and were up 2.9%, trading above their 50-day and 200-day moving averages. The company recently beat quarterly earnings expectations, reporting $0.04 in EPS versus a consensus loss estimate of $0.13.
• Takeover speculation remains a major catalyst: Curaleaf raised its offer for Aurora by 25%, while Aurora’s special committee reviews the revised bid and advises shareholders to take no action for now.

Aurora Cannabis (NASDAQ:ACB - Get Free Report) was downgraded by equities research analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a report issued on Monday, Zacks reports.

Several other brokerages have also recently commented on ACB. BMO Capital Markets upgraded shares of Aurora Cannabis to a "hold" rating in a report on Wednesday, August 5th. Wall Street Zen upgraded shares of Aurora Cannabis from a "sell" rating to a "hold" rating in a research note on Sunday, September 13th. Finally, Weiss Ratings raised Aurora Cannabis from a "sell (e+)" rating to a "sell (d-)" rating in a research report on Friday. One equities research analyst has rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of "Hold".

Aurora Cannabis Trading Up 2.9%

NASDAQ:ACB opened at $4.59 on Monday. The company has a debt-to-equity ratio of 0.03, a current ratio of 5.36 and a quick ratio of 2.80. The business's 50-day simple moving average is $3.75 and its 200-day simple moving average is $3.39. Aurora Cannabis has a fifty-two week low of $2.56 and a fifty-two week high of $6.66. The stock has a market capitalization of $301.65 million, a PE ratio of -3.26 and a beta of 0.63.

Aurora Cannabis (NASDAQ:ACB - Get Free Report) last announced its earnings results on Wednesday, August 5th. The company reported $0.04 EPS for the quarter, topping the consensus estimate of ($0.13) by $0.17. Aurora Cannabis had a negative net margin of 32.26% and a positive return on equity of 4.37%. The firm had revenue of $47.62 million for the quarter, compared to the consensus estimate of $47.45 million. Sell-side analysts expect that Aurora Cannabis will post -0.07 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Aurora Cannabis

Hedge funds and other institutional investors have recently modified their holdings of the company. Tidal Investments LLC grew its stake in Aurora Cannabis by 1.2% during the second quarter. Tidal Investments LLC now owns 1,264,494 shares of the company's stock worth $3,528,000 after buying an additional 14,827 shares in the last quarter. Two Sigma Securities LLC acquired a new position in shares of Aurora Cannabis in the 2nd quarter valued at approximately $36,000. State of Wyoming bought a new position in Aurora Cannabis in the second quarter valued at approximately $56,000. Baader Bank Aktiengesellschaft raised its position in Aurora Cannabis by 37.3% during the first quarter. Baader Bank Aktiengesellschaft now owns 33,060 shares of the company's stock valued at $108,000 after purchasing an additional 8,990 shares in the last quarter. Finally, Leonteq Securities AG raised its position in Aurora Cannabis by 24.7% during the first quarter. Leonteq Securities AG now owns 42,839 shares of the company's stock valued at $140,000 after purchasing an additional 8,472 shares in the last quarter. Institutional investors and hedge funds own 47.63% of the company's stock.

Key Headlines Impacting Aurora Cannabis

Here are the key news stories impacting Aurora Cannabis this week:

• Positive Sentiment: Curaleaf raised its offer by 25%. The revised proposal includes 0.4013 Curaleaf shares plus US$1 in cash per Aurora share, with a cap price of US$6. The offer represents a substantial premium to Aurora’s pre-bid trading levels and is the primary catalyst supporting ACB. Curaleaf raises Aurora Cannabis offer by 25%
• Positive Sentiment: Aurora’s debt-free balance sheet makes it an attractive acquisition target. Curaleaf is seeking access to Aurora’s approximately US$105 million in cash and investments, as well as its global, EU-GMP-certified medical cannabis operations. Curaleaf’s Higher Aurora Bid Raises the Stakes in Cannabis Consolidation
• Positive Sentiment: Investor positioning reflects takeover speculation. Aurora call-option volume was reported at 248% above its typical level, suggesting traders are positioning for additional deal-related upside, although options activity is not a guarantee of a completed transaction.
• Neutral Sentiment: Aurora’s Special Committee is reviewing the revised bid independently. The company has advised shareholders to take no action until the review is complete and the Board issues a formal recommendation. This keeps the takeover premium in focus but leaves the final outcome uncertain. Aurora urges shareholders to take no action
• Neutral Sentiment: Schedule III tax relief is supporting broader cannabis M&A. Removing the 280E tax burden for qualifying medical cannabis businesses could improve industry cash flow and encourage consolidation, while Tilray’s upcoming earnings may provide a read-through on sector financial health.

About Aurora Cannabis

Aurora Cannabis Inc is a Canadian cannabis company focused primarily on the production, distribution and sale of medical cannabis. The company offers cannabis products such as dried flower, pre-rolls, oils, softgels, capsules and other formulations through its medical and consumer brands.

Founded in 2013 and headquartered in Edmonton, Alberta, Aurora serves adult-use and medical markets in Canada and supplies medical cannabis to selected international markets. Its international operations and partnerships have included markets in Europe, Australia and other regions where cannabis is permitted for medical use.

Aurora sells products under brands including Aurora, CanniMed, MedReleaf and San Rafael '71.

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