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Aurora Cannabis Inc ACB

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Stock XNAS Rating as of
$4.52 −0.12 (2.59%)
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As of Delayed Price Closed
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Company Report

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Aurora Cannabis: Slashing Fair Value Estimates as Small Size Handicaps Its Competitiveness

Kristoffer Inton

After reviewing no-moat Aurora Cannabis’s fiscal fourth-quarter results, we’ve slashed our fair value estimates to $9.50 and CAD 13 per share, down from $16.50 and CAD 22.50, respectively. Despite trading well below our fair value estimates, we see significant idiosyncratic risk in Aurora and see better risk-adjusted upside in no-moat US multistate operators Curaleaf and Green Thumb.

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Price vs Fair Value

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ACB is trading at a 877% premium.
Price
$4.64
Fair Value
$2.20
Uncertainty
Extreme
1-Star Price
$44.00
5-Star Price
$6.75
Economic Moat
Mvx
Capital Allocation
Xmqdj

Bulls Say, Bears Say

Bulls

Aurora is now generating consistent positive adjusted EBITDA, so free cash flow is eventual. The need for dilutive share issuances should fall.

Bears

Aurora has repeatedly issued equity at massive discounts to our fair value estimate, diluting existing shareholders and destroying value. There's a risk it'll do it again.

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Trading Information

Previous Close Price
$4.64
Day Range
$4.46–4.65
52-Week Range
$2.84–11.50
Bid/Ask
$4.50 / $4.52
Market Cap
$246.56 Mil
Volume/Avg
870,879 / 6.9 Mil

Key Statistics

Price/Earnings (Normalized)
46.06
Price/Sales
0.98
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Aurora Cannabis, headquartered in Edmonton, Canada, cultivates and sells medicinal and recreational cannabis through a portfolio of brands that includes Drift, San Rafael '71, Daily Special, Whistler, Being, and Greybeard. Although the company primarily operates in Canada, it has expanded internationally through medical cannabis exporting agreements.
Sector
Healthcare
Industry
Drug Manufacturers - Specialty & Generic
Stock Style Box
Small Value
Total Number of Employees
1,130
Website
https://www.auroramj.com

Competitors

Valuation

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Metric
ACB
CRON
CGC
Price/Earnings (Normalized)
 46.061,396.06—
Price/Book Value
 0.600.811.54
Price/Sales
 0.989.302.13
Price/Cash Flow
 ———
Price/Earnings
ACB
CRON
CGC

Financial Strength

Metric
ACB
CRON
CGC
Quick Ratio
 1.3126.511.09
Current Ratio
 3.4228.191.58
Interest Coverage
 −4.10—−3.63
Quick Ratio
ACB
CRON
CGC

Profitability

Metric
ACB
CRON
CGC
Return on Assets (Normalized)
 −1.68%−0.28%−17.78%
Return on Equity (Normalized)
 −2.80%−0.29%−46.87%
Return on Invested Capital (Normalized)
 −1.87%−4.97%−16.41%
Return on Assets
ACB
CRON
CGC
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