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Aurora Cannabis (ACB) to Post Q2 Earnings: What's in Store?

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Aurora Cannabis Inc. ACB is scheduled to report second-quarter fiscal 2021 results on Feb 11, after the opening bell.

In the last reported quarter, the company witnessed an earnings miss of 166.7%.

Q2 Estimates

For the fiscal second quarter, the Zacks Consensus Estimate for the bottom line is pegged at a loss of 19 cents per share. The same for revenues stands at $54.7 million, suggesting a rise of 28.8% from the year-ago quarter’s reported figure.

Factors to Note

With the production and sale of cannabis being considered essential services across Canada and Europe, the company is likely to have witnessed sustained consumer cannabis sales with the help of online ordering and home delivery. This, in turn, is likely to have benefited Aurora Cannabis’ fiscal second-quarter performance.

Ongoing improvement in the company’s production cash cost per gram might get reflected in the gross margin on cannabis net revenues in the fiscal second quarter.

The company might have gained from its low cost per unit production, resulting in a brand creation across multiple pricing tiers while delivering robust and sustainable margins.

Also, Aurora Cannabis is likely to exhibit favorable results in its domestic and international medical businesses in the fiscal second quarter, driven by continued investments in these businesses.

Additionally, the company’s leadership in the Canadian International Medical markets is also expected to have retained its momentum through the fiscal second quarter.

Further, the company is consistently leveraging its coast-to-coast supply agreements to provide a wide range of premium consumer products throughout Canada. Moreover, it remains committed toward serving medical patients with a steady supply of premium products. The company recently launched its daily special vape offering, which quickly grabbed consumer attention and the number three spot in Ontario. These tailwinds might have contributed to its medical cannabis sales in the to-be-reported quarter.

Aurora Cannabis Inc. Price and EPS Surprise

Aurora Cannabis Inc. Price and EPS Surprise
Aurora Cannabis Inc. Price and EPS Surprise

Aurora Cannabis Inc. price-eps-surprise | Aurora Cannabis Inc. Quote

In November 2020, the company inked a strategic supply deal with Cantek Holdings (Cantek), one of Israel's leaders in the medical cannabis field. This development is likely to have aided its performance in the fiscal second quarter performance.

The Aurora Nordic 1 facility, which is a recently EU GMP certified production facility located in Denmark, might have led to more efficient distribution of products in Europe and around the world through the fiscal second quarter.

Aurora Cannabis has been selectively collaborating with a number of organizations, developing inventory and prioritizing its resources for sometime now to make sure that consumers across Canada have access to its high-quality derivative products including edibles, vapes and infused beverages. This is likely to have supported its to-be-reported quarter’s performance.

Here’s What the Quantitative Model Suggests

Our proven model does not predict an earnings beat forAurora Cannabis this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat but that is not the case here as elaborated below.

Earnings ESP: Aurora Cannabis has an Earnings ESP of -26.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Aurora Cannabis carries a Zacks Rank #3, currently.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.

Option Care Health, Inc. OPCH has an Earnings ESP of +34.69% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Radius Health, Inc. RDUS has an Earnings ESP of +10.54% and a Zacks Rank #2, at present.

DENTSPLY SIRONA Inc. XRAY has an Earnings ESP of +4.45% and is presently a Zacks #2 Ranked stock.

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