Will Aurora Cannabis Survive the Stock Market Meltdown?

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

ACB – Before the whole crisis unfolded investors in Aurora Cannabis (NYSE: ACB) were concerned for many reasons.

Get Free Updates

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

 

No sector in the market has been safe for the past month, and the cannabis sector has especially been hit hard. As the COVID-19 crisis unfolds many investors are concerned about where the cannabis sector is heading next.

Before the whole crisis unfolded investors in Aurora Cannabis (NYSE: ACB) were concerned for many reasons; management, debt, and a clear path to revenue, just to name a few. These problems, many speculate, have compounded as capital gets harder to obtain, revenue is projected downwards, and investors flee to cash.

So does ACB have what it takes to weather this challenging economic environment?

The company is one of the worst-performing stocks in the cannabis sector, falling almost 93% in just 12 months. During their last quarterly earnings report the company missed guidance. And CCO Cam Battley, who is no longer with Aurora Cannabis, had predicted positive EBITDA in 2020. Instead, during their last quarter, the company reported an adjusted EBITDA loss of CA$11.7 million.

In addition, ACB has had diminishing sales numbers for the past two quarters. First to $75.2 million CAD and then again to $56 million CAD in the most recent quarter.

The reason investors were willing to pay such a high premium more than a year ago was that they anticipated cannabis companies to grow revenues dramatically. What happened instead was the total opposite.

Based on it’s share price, it’s clear that investors have not been happy about the numbers coming out of Aurora Cannabis and that’s a significant reason why the stock has fallen so dramatically.

Now on the topic of cash, in the second quarter ACB reported having cash and cash equivalents totaling CA$156.3 million. Over the past six months, the company has burned through roughly CA$229.6 million in operating expenses. So it’s not surprising that some analysts feel that ACB has just a few months left of liquidity before it runs out.

So with all of this bad news piled on for ACB, what can we look for if the company is to make an epic comeback?

First, the company needs to solidify a new CEO. They have told investors that it is on the hunt for a new full-time CEO but who knows how long that will take. There is speculation that a potential new CEO could have ties to Mondelez International, which might indicate some type of sale to the giant food and beverage company. This would be a positive for ACB.

There is also a rumor that the Alberta government is considering giving ACB funding in order to carry on with their operations and get them through these tough times, but that is yet to be announced as well.

There is just too much speculation and too many rumors about ACB at this point to give investors any sort of real confidence that the company will

definitively survive the economic storm we are currently in.

So at this point, all we can do is remain hopeful.

(Disclosure: The author is long on ACB)

Want more great investing ideas?

Buy the Bounce? Or Sell the Bounce?

Reitmeister Total Return portfolio – Discover the portfolio strategy that Steve Reitmeister used to produce a +5.13% gain while the S&P 500 fell by -14.97%.

Free Access Pass to Wealth365 Online Summit– join many of the world’s top investors to learn strategies to not just survive, but actually thrive in the midst of this bear market.

 


ACB shares were trading at $0.75 per share on Wednesday afternoon, up $0.03 (+4.25%). Year-to-date, ACB has declined -65.28%, versus a -23.13% 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

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

NYSE: XOM | Exxon Mobil Corporation  News, Ratings, and Charts

3 Energy Companies Likely to Survive the Downturn in Oil

Exxon Mobil (XOM) was the sixth leading oil company in the world, with $241 billion in revenues in 2018
NASDAQ: AAPL | Apple Inc. News, Ratings, and Charts

2 Solid Companies That are Sitting on Plenty of Cash

Microsoft (MSFT) and Apple (AAPL) both had lots of cash at the end of last week
NYSE: DLR | Digital Realty Trust, Inc.  News, Ratings, and Charts

Top 3 Stocks from the #1 Ranked Industry Revealed

This is a hidden group of stock winners in the Coronavirus economy. Find out what is driving share prices higher: DLR, COR & EQIX.
NYSE: CAT | Caterpillar, Inc.  News, Ratings, and Charts

4 “Beaten Down” Industrials to Buy for the Long Haul

Now is the time to creating a list of the best stocks to buy on the dip for the next bull market to emerge. And on that list you should add these 4 stocks: CAT, DE, DHR and ITW.
NYSE: GIS | General Mills, Inc.  News, Ratings, and Charts

3 Consumer Staple Stocks to Thrive from Coronavirus

Consumer habits will be impacted by the Coranavirus even after normality has returned. These 3 stocks will have major benefit from this behavioral change: GIS, CPB and CAG

Read More Stories


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

Event/DateSymbolNews DetailStart PriceEnd PriceChangePOWR Rating
Loading, please wait...
View All ACB News
Page generated in 1.1605 seconds.