Medical cannabis company Aurora Cannabis (ACB) has surprised markets with a record-breaking third quarter, sending its shares soaring over 80% in the past week. Growth in global medical cannabis in key international markets like Germany, Australia, Poland, and the UK has caused the company’s international revenue to surge 112%. The company is scaling its EU GMP and TGA GMP-certified facilities to meet the growing global demand. The company ended the quarter with surplus cash on hand and no debt and anticipates that revenue growth, strong margins, and positive free cash flow will continue into the foreseeable future.
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The stock trades at a relatively attractive valuation, making it a potentially compelling target for investors looking to add a little green to their portfolio.
Leaning into New Markets
Aurora is a Canadian-based leader in global cannabis markets. It offers medical and consumer cannabis products throughout Canada, Europe, Australia, and South America. Its expansive portfolio of brands caters to a broad customer base, delivering products for both medical and recreational use.
The company recently announced the launch of IndiMed, its first German-cultivated medical cannabis product. This move is an important milestone, as it marks the company’s entry into the growing German market following the recent decriminalization of cannabis in the country. These products are manufactured at Aurora’s EU-GMP facility in Leuna, Germany, and meet the high-quality standard necessary to supply pharmaceutical-grade medical cannabis to the German market.
Impressive Financial Growth
Aurora reported its Q3 2025 results, recording all-time highs in multiple areas, including global medical net revenue, net income, adjusted EBITDA, and free cash flow. The company’s strong performance is attributed to significant growth in its global medical cannabis and plant propagation businesses, which led to a 112% surge in international net revenue, accounting for 60% of global medical cannabis net revenue.
Total net revenue was $88.2 million, up 37% year-over-year, primarily due to. Adjusted gross profit soared by 67% to $56.0 million versus $33.6 million in the same quarter the prior year. Net income from continuing operations was $31.2 million compared to a net loss of $17.1 million in the prior year period.
Adjusted EBITDA also increased substantially by 316% to $23.1 million for the three months ending December 31, 2024. Despite a 15% decrease in consumer cannabis net revenue, the company’s decision to prioritize the supply of its GMP-manufactured products to its high-margin global medical cannabis business led to overall financial growth.
Management has issued guidance for Fiscal Q4 2025, anticipating continued year-over-year revenue growth in international medical cannabis. Margins are projected to remain robust with positive adjusted EBITDA. Forecasted free cash flow to be modestly positive, resulting from ongoing revenue growth and improved cash operations.
Stock Shows Value and Momentum
After hitting a high point in late April 2024, shares had been on a downward trajectory until the recent news catalyzed new life into the shares, helping them to post roughly 39% growth over the one-year holding period. The stock trades near the upper-middle of its 52-week price range of $2.84 – $9.35 and demonstrates ongoing positive price momentum by trading above the major moving averages. Its P/S ratio of 1.51x positions it attractively compared to the Health Care sector average of 3.65x.
Analysts following the company have been mainly constructive on ACB stock. Aurora Cannabis is rated a Moderate Buy overall, based on the recent recommendations of five analysts. The average price target for ACB stock is $6.71, representing a potential upside of 11.28% from current levels.
Final Analysis on ACB Stock
Aurora Cannabis’ impressive performance in the third quarter, marked by a significant surge in its global medical cannabis revenue, has recently caught the market’s attention, leading to an over 80% boost in its shares. Its successful entry into booming international markets has contributed to its strong financial growth. The company’s prudent strategy to focus on supplying its high-quality products to the global medical cannabis business promises continued revenue growth and healthy margins ahead. While its shares are doing well, analysts view the stock’s current valuation as attractive, which suggests investors looking for value in the healthcare sector might find this stock an appealing addition.
