Canadian cannabis producer Aurora Cannabis (ACB) will report fiscal second-quarter earnings late Thursday, amid a broader marijuana stocks rally spurred by the U.S.’ legalization prospects and signs of a bigger retail craze.
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The results come as the company navigates production rollbacks and facility closures, as well as a shift toward premium weed offerings and away from cheaper — and less profitable — product.
Aurora Cannabis Earnings
Estimates: Wall Street expects Aurora to lose 19 cents per share, or 24 cents Canadian. Revenue was expected to jump 29% to $54.66 million, or 69.42 million Canadian.
Results: Check back after the close.
Aurora Cannabis Stock, Marijuana Stocks
Aurora Cannabis stock fell 8.6% to 17.29 on the stock market today, following a massive rally this week. Still, the Composite Rating for Aurora is 63. Its EPS Rating is a weak 2. Aurora, like other marijuana stocks, are still searching for profitability.
Among those other Canadian marijuana stocks, Canopy Growth (CGC) sold off 13.7%y Thursday. Cronos Group (CRON) lost 11%.
Aphria (APHA) fell 13%. Tilray (TLRY) sank 22.6%. Those two companies plan to merge.
Marijuana stocks have launched higher on post-Election Day excitement. However, what shape U.S. cannabis reform might take is far from clear. Canada’s entry into the U.S. isn’t guaranteed.
There was also speculation that individual investors, including those on the Reddit board WallStreetBets, had shown more interest in marijuana stocks. But exactly what type of investor is driving the rally is unclear.
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‘Back To Basics’
In Canada, higher store counts — particularly in the large province of Ontario — have helped speed sales growth for the marijuana industry. But Aurora has been trying to improve its balance sheet, after analysts raised concerns about debt and cash. The company has also been accused by analysts of growing too much weed.
In December, Aurora efforts to go “back to basics” — to operate more like a consumer packaged goods company — would push back its ability to turn a profit. It also said “unpredictability of the current demand environment, including the resurgence of COVID-19” would contribute to that delay. Other marijuana stocks have also cut back operations.
At that time, Aurora said it closed its Aurora Sun facility during the prior month. And it said it was cutting production at another facility, Aurora Sky, to 25% of its previous capacity. Aurora said it would turn Aurora Sky into a “high-value cultivation center for our premium strains, and in turn, better align production with current demand for premium flower.”
Aurora also said it would focus more on third-party cannabis suppliers and rely less on costly cultivation efforts. The company, in recent months, has reworked its line of credit with lenders.
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