S&P 500   4,583.41 (+0.70%)
DOW   35,648.50 (+0.44%)
QQQ   382.61 (+0.69%)
AAPL   152.34 (+2.34%)
MSFT   322.66 (-0.16%)
FB   315.05 (+0.91%)
GOOGL   2,922.19 (-0.07%)
TSLA   1,071.05 (+3.20%)
AMZN   3,466.99 (+2.20%)
NVDA   247.03 (+1.03%)
BABA   169.91 (+0.40%)
NIO   40.53 (+3.10%)
CGC   12.83 (+0.39%)
GE   104.02 (+0.16%)
AMD   120.92 (-1.11%)
MU   69.45 (+1.77%)
T   25.58 (+2.08%)
F   16.94 (+9.22%)
ACB   6.85 (+0.15%)
DIS   169.98 (+0.25%)
PFE   43.13 (+0.37%)
BA   206.73 (+0.06%)
AMC   35.07 (+0.89%)
S&P 500   4,583.41 (+0.70%)
DOW   35,648.50 (+0.44%)
QQQ   382.61 (+0.69%)
AAPL   152.34 (+2.34%)
MSFT   322.66 (-0.16%)
FB   315.05 (+0.91%)
GOOGL   2,922.19 (-0.07%)
TSLA   1,071.05 (+3.20%)
AMZN   3,466.99 (+2.20%)
NVDA   247.03 (+1.03%)
BABA   169.91 (+0.40%)
NIO   40.53 (+3.10%)
CGC   12.83 (+0.39%)
GE   104.02 (+0.16%)
AMD   120.92 (-1.11%)
MU   69.45 (+1.77%)
T   25.58 (+2.08%)
F   16.94 (+9.22%)
ACB   6.85 (+0.15%)
DIS   169.98 (+0.25%)
PFE   43.13 (+0.37%)
BA   206.73 (+0.06%)
AMC   35.07 (+0.89%)
S&P 500   4,583.41 (+0.70%)
DOW   35,648.50 (+0.44%)
QQQ   382.61 (+0.69%)
AAPL   152.34 (+2.34%)
MSFT   322.66 (-0.16%)
FB   315.05 (+0.91%)
GOOGL   2,922.19 (-0.07%)
TSLA   1,071.05 (+3.20%)
AMZN   3,466.99 (+2.20%)
NVDA   247.03 (+1.03%)
BABA   169.91 (+0.40%)
NIO   40.53 (+3.10%)
CGC   12.83 (+0.39%)
GE   104.02 (+0.16%)
AMD   120.92 (-1.11%)
MU   69.45 (+1.77%)
T   25.58 (+2.08%)
F   16.94 (+9.22%)
ACB   6.85 (+0.15%)
DIS   169.98 (+0.25%)
PFE   43.13 (+0.37%)
BA   206.73 (+0.06%)
AMC   35.07 (+0.89%)
S&P 500   4,583.41 (+0.70%)
DOW   35,648.50 (+0.44%)
QQQ   382.61 (+0.69%)
AAPL   152.34 (+2.34%)
MSFT   322.66 (-0.16%)
FB   315.05 (+0.91%)
GOOGL   2,922.19 (-0.07%)
TSLA   1,071.05 (+3.20%)
AMZN   3,466.99 (+2.20%)
NVDA   247.03 (+1.03%)
BABA   169.91 (+0.40%)
NIO   40.53 (+3.10%)
CGC   12.83 (+0.39%)
GE   104.02 (+0.16%)
AMD   120.92 (-1.11%)
MU   69.45 (+1.77%)
T   25.58 (+2.08%)
F   16.94 (+9.22%)
ACB   6.85 (+0.15%)
DIS   169.98 (+0.25%)
PFE   43.13 (+0.37%)
BA   206.73 (+0.06%)
AMC   35.07 (+0.89%)

Aurora Cannabis Is Shifting Gears 

Tuesday, September 28, 2021 | Thomas Hughes
Aurora Cannabis Is Shifting Gears 

Aurora Cannabis Capitulates On The Recreational Market

Aurora Cannabis (NYSE: ACB) is shifting gears and we like it. After years of fruitless effort spent on wild growth campaigns chasing the consumer dollar, the company has decided to focus on the medical end of the business. While Aurora will maintain its recreational operations, it will shift that focus towards higher-margin premium brands and operational efficiencies that are expected to drive profitability very soon. 

As for the medical end of the business, medical cannabis carries a far higher margin than the recreational market and is growing at a far greater pace. The Canadian recreational market is slowly creeping back but still down double digits from last year due to COVID lockdown and the impact of tourism. What this means for the Marketbeat.com community is the company business will strengthen in the near term on the medical end and that will set it up for leverage in the recreational market once COVID is behind us.

Aurora Cannabis’ Sales Slump

Aurora Cannabis reported C$54.83 in net consolidated revenue for the fiscal fourth quarter which is down sequentially and almost 20% lower than the previous year. The decline in sales is driven entirely by the consumer end which fell 45% from last year despite a high single-digit sequential increase. On the medical end, medical sales are up 9% system-wide and 84% in the hyper-growth international segment. Growth in the international segment should continue in the current quarter due to a new contract in Israel and we expect this will not be the last deal to be made.

Moving down the report, the company reported significant improvement in the adjusted gross margins x-impact of fair value adjustments. Company-wide, adjusted gross margin came in at 54% versus 49% last year while on the medical end of the business margins topped 68%. On the bottom line, the company continues to show adjusted EBITDA losses but the loss narrowed 55% to $13.90 million from last year's $31.50 million.

“We are now delighted to announce a long-term supply agreement with Cantek in Israel that we expect to provide us with a steady stream of high-margin revenue that could also evolve into a larger partnership over time. We further believe our Canadian adult recreational segment is poised for recovery due to our product portfolio enhancements coupled with an acceleration of new store openings and rising consumer demand," says CEO Miguel Martin.

Most importantly, the company's operations and efficiencies improved cash flow over the last year. Working capital more than doubled to $404.30 million while the company's cash balance remained strong at $440.90 million. Looking forward, the gains in margin should stick because they are due primarily to the company's efforts to improve operational efficiencies and additional efficiencies are expected. The company is projecting another $60 to $80 million in cost savings by the middle of calendar 2022 which should put it firmly into profitability.

The Technical Outlook: Aurora Cannabis Is In The Bargain Basement

Shares of Aurora Cannabis are moving lower in early premarket action but are still above long-term support at the $5 to $5.50 range. While price action may edge lower in the near term, we view this stock as at or near the bottom and ripe for a reversal. With shares trading at such a low price, and the company's focus finally shifting towards high-margin sales in the medical business, it's hard not to be interested. 

Aurora Cannabis Is Shifting Gears 

Should you invest $1,000 in Aurora Cannabis right now?

Before you consider Aurora Cannabis, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Aurora Cannabis wasn't on the list.

While Aurora Cannabis currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

 


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Aurora Cannabis (ACB)1.4$6.85+0.1%N/A-2.11Hold$6.71
Compare These Stocks  Add These Stocks to My Watchlist 

Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.