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Aurora Cannabis (TSE:ACB)
TSX:ACB
Top Page
Aurora Cannabis
(TSX:ACB)
53Neutral
Positive Factors
Market Strategy
ACB has turned over a proverbial new leaf following the reset in the cannabis industry, now with a focus on responsible growth.
Revenue Streams
ACB generates 80% of its cannabis sales from medical, a market with higher gross margin, greater price stability, and more predictable cash flows.
Negative Factors
Industry Risks
There are lingering risks in the emerging cannabis industry including rampant illicit markets, limited insurance coverage, and unpredictable path to further de-regulation.
Aurora Cannabis (ACB) vs. S&P 500 (SPY)
Market Cap
$351.26M
Dividend YieldN/A
Average Volume (3M)758.09K
Price to Earnings (P/E)27.5
Beta (1Y)2.05
Revenue Growth16.39%
EPS Growth-98.10%
CountryCA
Employees1,073
SectorHealthcare
Sector Strength78
IndustryPharmaceuticals
Share Statistics
EPS (TTM)0.23
Shares Outstanding54,884,052
10 Day Avg. Volume385,886
30 Day Avg. Volume758,090
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.63
Price to Cash Flow (P/CF)3.00
P/FCF Ratio3.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$9.75Price Target Upside55.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Aurora Cannabis Business Overview & Revenue Model
Company DescriptionAurora Cannabis Inc. is a Canadian company operating primarily in the cannabis sector. Founded in 2006 and headquartered in Edmonton, Alberta, Aurora is engaged in the production, distribution, and sale of both medical and recreational cannabis products. The company offers a wide range of cannabis products, including dried flower, oils, softgel capsules, and edibles. Aurora operates across various international markets, leveraging its extensive network of subsidiaries and strategic partnerships to expand its global footprint.
How the Company Makes MoneyAurora Cannabis makes money through several key revenue streams. Primarily, the company generates revenue from the sale of medical and recreational cannabis products across Canada and international markets. Aurora also benefits from its extensive portfolio of premium brands which cater to different consumer preferences and price points. Additionally, the company engages in wholesale distribution agreements with other cannabis companies, enabling it to maximize the reach of its products. Aurora's strategic partnerships and acquisitions further bolster its earnings by providing access to new markets and advanced cultivation technologies. Furthermore, Aurora invests in research and development to innovate and introduce new products, which can lead to new revenue opportunities. The company's vertical integration, from cultivation to retail, allows it to control costs and improve margins, contributing to its overall profitability.
Aurora Cannabis Financial Statement Overview
Summary
Aurora Cannabis is facing significant financial challenges. Despite a positive gross profit and revenue growth, the company continues to operate at a net loss with negative cash flow, highlighting ongoing operational inefficiencies. The balance sheet shows conservative leverage but poor return metrics.Income Statement
Aurora Cannabis has been facing significant challenges in its income statement. Although there was a positive gross profit in the latest year, the company continues to operate at a net loss with a negative net profit margin. The revenue growth rate was positive, indicating some recovery, but the EBIT and EBITDA margins remain negative, reflecting ongoing operational inefficiencies.20
Very Negative
Balance Sheet
The balance sheet shows a moderately stable capital structure with a low debt-to-equity ratio, indicating conservative leverage use. However, the return on equity is negative due to persistent losses, which undermines shareholder value. The equity ratio remains strong, suggesting an asset-heavy structure, which may provide some stability.30
Negative
Cash Flow
Aurora's cash flow situation is concerning, with negative free cash flow indicating more cash is leaving the business than is being generated. The operating cash flow to net income ratio suggests inefficiencies in cash generation relative to reported earnings. Despite this, the company has shown some improvement in free cash flow growth, albeit from a low base.25
Negative
| Breakdown | ||||
| Mar 2024 | Mar 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 270.28M | 231.58M | 221.34M | 245.25M | 278.91M | Gross Profit |
| 131.46M | -60.45M | 21.23M | -21.56M | -33.54M | EBIT |
| -46.45M | -245.50M | -231.45M | -282.82M | -490.96M | EBITDA |
| 20.47M | -203.32M | -143.09M | -137.20M | -393.23M | Net Income Common Stockholders |
| -69.33M | -263.79M | -1.72B | -693.63M | -3.31B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 117.47M | 300.84M | 439.14M | 425.21M | 169.25M | Total Assets |
| 838.67M | 926.32M | 1.08B | 2.60B | 2.78B | Total Debt |
| 104.79M | 227.52M | 269.49M | 399.55M | 531.25M | Net Debt |
| -8.65M | -73.32M | -168.32M | -21.91M | 369.07M | Total Liabilities |
| 236.80M | 404.62M | 422.00M | 567.03M | 657.25M | Stockholders Equity |
| 559.77M | 490.64M | 661.84M | 2.04B | 2.15B |
| Cash Flow | Free Cash Flow | |||
| -85.46M | -125.13M | -142.05M | -263.66M | -692.96M | Operating Cash Flow |
| -68.51M | -115.81M | -109.84M | -210.58M | -337.95M | Investing Cash Flow |
| -5.49M | -27.31M | -36.60M | -26.91M | -249.48M | Financing Cash Flow |
| -47.92M | -56.48M | 147.78M | 521.95M | 582.56M |
Aurora Cannabis Technical Analysis
Negative
6.26
Price Trends
6.84
Negative
6.79
Negative
7.37
Negative
Market Momentum
-0.15
Positive
37.08
Neutral
6.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACB, the sentiment is Negative. The current price of 6.26 is below the 20-day moving average (MA) of 7.81, below the 50-day MA of 6.84, and below the 200-day MA of 7.37, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 37.08 is Neutral, neither overbought nor oversold. The STOCH value of 6.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ACB.
Aurora Cannabis Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.06B | 18.67 | 3.80% | ― | 35.87% | ― | |
53 Neutral | $351.26M | 27.53 | 4.78% | ― | 16.39% | -98.10% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% | |
47 Neutral | $183.01M | ― | -18.27% | ― | 7.33% | 84.41% | |
44 Neutral | $610.04M | ― | -7.28% | ― | 18.38% | 86.59% | |
32 Underperform | $290.12M | ― | -84.50% | ― | -16.27% | 76.17% |
* Healthcare Sector Average
Performance Comparison
TSE:ACB
Aurora Cannabis
6.26
2.31
58.48%
TLRY
Tilray
0.61
-1.07
-63.69%
TSE:WEED
Canopy Growth
1.59
-2.33
-59.44%
TSE:CRON
Cronos Group
2.73
0.08
3.02%
TSE:OGI
OrganiGram Holdings
1.42
-1.19
-45.59%
Aurora Cannabis Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 18.56% | Next Earnings Date: Jun 19, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, particularly in international market growth and record-breaking profitability. Despite a decline in Canadian recreational revenue and increased SG&A expenses, the company's robust financial position and operational efficiency improvements suggest a positive outlook.Highlights
Record-Breaking Revenue and Profitability
The company reported a record third quarter for medical cannabis revenue, net income, adjusted EBITDA, and free cash flow. Overall net revenue grew 37%, with international medical cannabis revenue increasing 112% year-over-year.
Strong International Performance
International revenue surpassed Canadian medical cannabis revenue for the second consecutive quarter, comprising 60% of global medical cannabis net revenue. Revenue in Australia and the UK reached record levels this quarter.
All-time High in Adjusted EBITDA
Adjusted EBITDA grew 316% to a record $23.1 million, marking the ninth consecutive quarter of positive adjusted EBITDA.
Robust Financial Position
The company ended the quarter with $180.2 million in cash and cash equivalents and no cannabis business debt.
Operational Efficiency and Margin Improvement
Adjusted gross margin for medical cannabis increased to 74% from 63% in the year-ago period, driven by sustainable cost reductions and improved manufacturing efficiency.
Lowlights
Decline in Canadian Recreational Revenue
Canadian recreational cannabis net revenue decreased to $9.9 million from $11.6 million in the year-ago period, with adjusted gross margins declining from 29% to 26%.
Increased SG&A Expenses
Consolidated adjusted SG&A increased by 12.6% to $31.3 million compared to the year-ago period, although this supported a 37% year-over-year net revenue growth.
Company Guidance
During the Aurora Cannabis Inc. third quarter 2025 conference call, significant guidance and metrics were provided, highlighting a record-breaking quarter. Aurora reported a 37% increase in net revenue, reaching $88.2 million, driven by 51% year-over-year growth in global medical cannabis revenue, with international revenue increasing by 112%. Medical cannabis comprised 77% of total net revenue, contributing 90% of the adjusted gross profit, while the adjusted gross margin hit a record 65%. The company achieved an all-time high in adjusted EBITDA, growing 316% to $23.1 million. Moreover, net income reached $31.2 million, reversing a loss from the previous year, and the company generated $27.4 million in positive free cash flow. Aurora's balance sheet remains strong with $180.2 million in cash and cash equivalents and no cannabis business debt, positioning it well for future growth opportunities in international medical cannabis markets.Aurora Cannabis Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
Aurora Cannabis Enhances Access to Medical Cannabis in Australia
Positive
Feb 15, 2025
Aurora Cannabis, in collaboration with its subsidiary MedReleaf Australia, has removed the concession card requirement for its IndiMed products, allowing broader patient access to medical cannabis in Australia. This move reflects Aurora’s commitment to simplifying prescription processes and adapting quickly to market demands, enhancing its position in the growing Australian medical cannabis market.
Product-Related AnnouncementsBusiness Operations and Strategy
Aurora Cannabis Secures Strategic $27 Million Supply Agreement with SNDL
Positive
Feb 7, 2025
Aurora Cannabis has announced a strategic supply agreement with SNDL Inc., a Canadian cannabis producer, to source premium cannabis flower over the next three years valued at $27 million. This partnership underscores Aurora’s strategy to leverage both in-house and third-party cultivation to enhance its product offerings, reflecting its commitment to quality and cultivation excellence, which is expected to strengthen its market position and benefit stakeholders.
Business Operations and StrategyFinancial Disclosures
Aurora Cannabis Achieves Record Third-Quarter Revenue and Income
Positive
Feb 5, 2025
Aurora Cannabis reported its fiscal 2025 third-quarter results with a total net revenue of $88.2 million, marking a 37% increase year-over-year, primarily driven by a 51% rise in its global medical cannabis sector. The company achieved record net income of $31.2 million and adjusted EBITDA of $23.1 million, both experiencing substantial growth. Aurora also generated positive free cash flow of $27.4 million, maintaining a strong balance sheet with $180 million in cash and a debt-free cannabis business. These results underscore Aurora’s leadership in the global cannabis industry, supported by international revenue growth and expansion in its plant propagation segment.
Business Operations and StrategyFinancial Disclosures
Aurora Cannabis Schedules Q3 2025 Investor Conference Call
Neutral
Jan 22, 2025
Aurora Cannabis announced it will host a conference call on February 5, 2025, to discuss its third-quarter 2025 financial results, which will be released earlier that day. This announcement is part of Aurora’s transparent communication strategy with investors, potentially impacting stakeholder confidence and market perceptions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.