An Inside Look at Aurora Cannabis

Aurora Cannabis (ACB) is currently priced at $13.01.  However, the stock was priced just under $90 at this time last year.  Cannabis investors far and wide are wondering if ACB is a solid investment at its current price or if it is poised to fall even further.  Let’s look at whether ACB is likely to bounce back near its 2019 trading level or if investors should cut their losses and move on to the next cannabis investing opportunity.

About Aurora Cannabis

ACB is a cannabis business based in Canada.  The company produces and distributes medicinal cannabis.  ACB’s specialty is cannabis genetics research and breeding.  The company also produces hemp as well.  Investors were smitten with ACB prior to its dramatic reduction in price largely because nearly all of its processes implement automation.  All in all, ACB conducts operations and sales in two dozen countries spanning five continents.

Aurora Cannabis From an Investor’s Perspective

Take a look at the analysts’ average price target of $11.31 and you will conclude ACB is slightly overvalued.  However, the high end of the analysts’ forecast for ACB is $18, meaning the stock might have some upside.  In total, nine analysts recommend holding the stock, there recommend buying and two advise investors to sell their ACB shares. 

StockNews.com’s POWR Ratings system has ACB graded as a “D” meaning it is advisable to sell.  The website’s exclusive POWR Rating Components have ACB’s Trade Grade as an F, its Buy & Hold Grade as an F and its Peer Grade as a D.  However, the stock is ranked in the top half of the couple hundred publicly traded companies in the Medical – Pharmaceuticals sector.  In terms of price returns, ACB is in the red but for the past three-month period n in which it generated a +48.52% price return.  Otherwise, the company’s price returns are negative going all the way back to 2017 when it generated a +343.60% price return.

Estimate Revisions

Wall Street analysts have revised their quarterly estimates for ACB across the past month.  Quarterly estimates have decreased from a loss of 36 cents per share to a loss of 27 cents per share.  Current year estimates have decreased from a $11.71 loss per share to a $11.45 loss per share.  In other words, the analysts are becoming increasingly bullish on ACB.  Add in the fact that ACB net sales spiked 35% from the prior quarter and it is easy to see why there is growing bullish sentiment for this cannabis stock.

The Verdict

ACB probably won’t return to its stratospheric trading levels of the 2019 summer yet the stock has the potential to rebound to the teens or possibly the $20 level in the year ahead.  If you believe cannabis will be legalized by federal governments in 2020, ACB belongs in your portfolio.  Otherwise, it is prudent to hold this stock until ACB executives find a way to get the company out of the red and into the black.

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