The long-awaited turnaround for Aurora Cannabis (ACB) is no closer to becoming a reality, according to one analyst.

Following the Canadian LP’s lackluster latest quarterly statement, Jeffries' Owen Bennett believes there’s “little to be bullish about given the current valuation.”

Bennett had only recently expressed worries about Aurora’s top-line performance, and his concern was valid given FQ2’s results.

The company reported revenue of C$67.67 million, which came in under consensus estimates by C$1.02 million. Additionally, the company’s promise to turn EBITDA positive in the quarter didn’t work out either; Aurora reported Adj. EBITDA (excl. one-time costs) of C$-12.1 million. Furthermore, Canadian recreational sales sequentially declined by 17%, despite new retail store openings and the launch of vape and edibles products.

“Recent actions were supposed to support margin delivery but we are seeing no evidence of this yet,” Bennett said. “We saw little sequential improvement on GM despite the increased sales of high margin medical cannabis, SG&A (along with R&D expense) as a percentage of sales further increased in Q3, and there was a worsening in adj. EBITDA.”

Canadian cannabis stocks have run up significantly recently, as U.S. marijuana reform at the federal level appears a real near-term possibility. Investors are evidently banking on cannabis companies north of the border entering the lucrative U.S. market. While Bennett counts fellow Canadian companies, Cronos and Canopy as overvalued too, the two could yet make an impact in the U.S market. However, with heavy cash outflow and debt payments due shortly, the same cannot be said of Aurora.

“We question whether it even has enough to compete effectively in the CBD space (see how much Canopy is spending), never mind the THC space. It also may not be easy to raise any more capital when the US opens up as most likely any smart institutional money will be moving into US MSOs,” Bennett forlornly summed up.

As a result, Bennett rates ACB an Underperform (i.e. Sell), backed by a C$4.59 ($3.64) price target. This target implies ~70% downside from current levels. (To watch Bennett’s track record, click here)

According to Bennett’s colleagues, the outlook for Aurora is not very promising, either. The stock has a Moderate Sell consensus rating based on 4 Holds and 7 Sells. The average price target stands at C$11.99 ($9.5) which suggests shares will be changing hands for a 33% discount over the next 12 months. (See ACB stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.