Why is Thursday Such an Important Day for Aurora Cannabis (ACB)?

: ACB | Aurora Cannabis Inc. Common Shares News, Ratings, and Charts

ACB – Aurora Cannabis was expected to be profitable by the end of 2019, but announced last quarter their estimates were pushed back to 2020.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

 

Earnings season is about to heat up this week for cannabis stocks, as Canopy Growth Corporation and Aurora Cannabis will both report earnings.  Canopy Growth is set to report on Thursday, November 14th before the market opens and Aurora Cannabis is set to report earnings on the same day, after the market closes. Their results will no doubt drive their share prices, as well as other cannabis stocks, over the next few weeks.  With expectations for the cannabis sector falling, bullish investors are hoping for some much needed positive news. 

On Monday, November 11th MKM Partners lowered their quarterly estimates on Canopy Growth and Aurora Cannabis, noting that they expect neither company to show much improvement in sales when they report their earnings. 

MKM analyst Bill Kirk laid out his reasons for the cuts. First off inventory held across provinces is weighing on shipments from manufacturers. Second, pricing is falling and the lower prices are still not as competitive as the price of weed in the illegal black market. Bill stated in a note to his clients that “While net sales estimates have come down for both since the end of August, we believe there is still some risk to revenue estimates and EBITDA estimates.” He continued, “With sequential growth suddenly stalling/declining, we believe profit and loss de-leverage will negatively surprise.”

Overall, what we’ve seen throughout the cannabis sector are companies that over promise and underdeliver.  Other cannabis companies who previously made optimistic earnings expectations have been punished recently, like HEXO, who has lost an immense amount of value over the past few months. 

Aurora Cannabis was expected to be profitable by the end of 2019, but announced last quarter their estimates were pushed back to 2020. Bill Kirk also mentioned that “For instance, Aurora is unlikely to be EBITDA positive by June 2020 as consensus expects,” In Aurora’s case we need to see revenues materialize from the new cannabis 2.0 market for edibles, extracts and oils along with international revenue growth.

At some point, the cannabis sector will become oversold.  Better than expected earnings from Canopy Growth and Aurora Cannabis could trigger a rebound for the sector but many investors don’t seem to think that’s in the cards, as short sellers have continued to build positions in the cannabis stocks, even as many sit near 52-week lows.

These earnings will be very important to the sector.  So keep a close eye on these two stocks on Thursday, as their reports will surely bring volatility to the whole cannabis sector.

(Disclosure: The author owns shares of Aurora Cannabis and Canopy Growth Corporation)

 


ACB shares rose $0.01 (+0.28%) in after-hours trading Tuesday. Year-to-date, ACB has declined -28.02%, versus a 25.36% rise in the benchmark S&P 500 index during the same period.


About the Author: Aaron Missere


Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
ACBGet RatingGet RatingGet Rating
CGCGet RatingGet RatingGet Rating
ACBGet RatingGet RatingGet Rating
CRONGet RatingGet RatingGet Rating
APHAGet RatingGet RatingGet Rating
TLRYGet RatingGet RatingGet Rating
CTSTGet RatingGet RatingGet Rating

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Top Stories on StockNews.com

NASDAQ: GWPH | GW Pharmaceuticals Plc News, Ratings, and Charts

Why Investors Should be Bullish About GW Pharmaceuticals (GWPH)

GW Pharmaceuticals (GWPH) has been on a steady downtrend since they reported their last quarterly earnings in November.
NASDAQ: FB | Facebook, Inc. -  News, Ratings, and Charts

Why I Believe Facebook (FB) is Headed Higher

It’s been a relatively quiet couple of years for Facebook (FB), with the stock up barely 10% since the end of 2017, just one-third of the performance of its Nasdaq-100 (QQQ) benchmark.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

Five Steps Towards Building a Passive Aggressive Portfolio

The trend of index or “passive” investing accelerated following the financial crisis and seems to now represent a generational shift in the way investors approach the stock market.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

The Most Important Economic News Investors Should Care About This Week

This week will be chock full of important economic news that could send the S&P 500 surging or plunging, depending on the outcomes.
NASDAQ: VOD | Vodafone Group Plc each representing ten Ordinary Shares News, Ratings, and Charts

Top 10 Perfect Stocks for December

How about 10 stocks that blend growth + momentum + value + timeliness. VOD and IGT are just 10 of the stocks that make the grade. Find the full list of these "perfect" stocks below.

Read More Stories


More Aurora Cannabis Inc. Common Shares (ACB) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All ACB News
Page generated in 1.8723 seconds.