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What makes Aurora Cannabis (ACB) an attractive stock?

Carla Olson | 9:17 am ET, 25 Mar 2019

Disclaimer: The following piece is my perspective on what makes Aurora Cannabis an attractive investment; this is not a personal endorsement or a recommendation of the stock.

Aurora Cannabis Inc (ACB) shares are trading at $9.03.  The stock has performed strongly in the last month and returned +36.31%.

Compared to other cannabis industry darlings, Aurora has done well, regardless of consistent operational losses and negative profit margin it generates. 

Analysts speculate the key reason why the stock is doing well is because of its hyper-growth.  But there are more fundamental things to note: 

  • The management team at Aurora Cannabis has innovated quite a bit in the past, particularly on the financial front.  The company struck a deal with Nelson Peltz, the head of Trian Fund Management (a multi-billion dollar investment firm)--and gave him the right to acquire 19.96 million shares of Aurora’s common stock over the next four years at a price of C$10.34 per share.  Today, the stock can be purchased way above this price point.   
  • The cannabis industry, on the whole, is growing very fast globally, although growth prospects might be fueling some risk of overcapacity. To tackle the risk, Aurora has entered partnerships aimed at distribution and new product lines.  Notable are Levi partnership aimed at the development of new hemp jeans line, and Head and Shoulders shampoo line with oils to relax scalp. 
  • The cannabis market is a global phenomenon and the company has made significant strides to expand its geo coverage.  It has begun selling oil to German pharmacies through its subsidiary Aurora Deutschland, a company it acquired in 2017.  The company is also entering Portuguese market.

Aurora Cannabis Inc (ACB) average analyst price target ($13.06) is 44.63% above its current price ($9.03).

For the latest price, stock analysis and news on Aurora Cannabis Inc, ask Finny "ACB", "ACB analysis" or "ACB news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Aurora Cannabis Inc (ACB) Buy or Sell Stock Guide

1:51 am ET, 14 Apr 2019

Are you looking for the analysis of Aurora Cannabis Inc (ACB) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 6 reasons to buy and 3 reasons to sell ACB stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about ACB stock:

  • Is ACB a buy or a sell?
  • Should I sell or hold ACB stock today?
  • Is ACB a good buy / investment?
  • What are ACB analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy ACB stock:

1. Revenue growth looks solid. Opportunities are huge for cannabis stocks. The company is growing internationally, which makes the business more sustainable in the long-term.

2. Aurora has begun selling oil to German pharmacies through its subsidiary Aurora Deutschland. The company had made the right decision to acquire a German cannabis market leader in 2017.

3. The company is growing leveraging many partnerships. It has recently appointed billionaire Nelson Peltz as a strategic advisor.

4. ACB quarterly revenue growth was 363.10%, higher than the industry and sector average revenue growth (2.00% and 3.10%, respectively). See ACB revenue growth chart.

5. ACB average analyst rating is Buy. See ACB analyst rating chart.

6. ACB average analyst price target ($13.30) is above its current price ($8.88). See ACB price target chart.

Now that you understand the bull case, let’s look at the reasons to sell ACB stock (i.e., the bear case):

1. The valuation is high and some investors worry that there could be a pullback after the shares steeply rose YTD.

2. Goodwill is increasing, which worries some investors; also the cash flow is negative. High goodwill is not good for any company.

3. Operating expenses are increasing. Investors would like the company to focus on reducing its expenses.

Now let's look at the key statistics for ACB:

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What are your thoughts on ACB?

If you liked this analysis, check out Buy or Sell Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


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