Aurora Cannabis (ACB) to Post Q3 Earnings: What's in Store?

Zacks Equity Research
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Aurora Cannabis Inc. ACB is scheduled to report third-quarter fiscal 2021 results on May 13, after the opening bell.

In the last reported quarter, the company witnessed a negative earnings surprise of 47.4%.

Q3 Estimates

For the fiscal third quarter, the Zacks Consensus Estimate for the bottom line is pegged at a loss of 17 cents per share. The same for revenues stands at $56.3 million, suggesting a dip of 0.1% from the year-ago quarter’s reported figure.

Factors to Note

As the production and sale of cannabis are considered essential services across Canada and Europe, the company is likely to have witnessed sustained consumer cannabis sales via a surge in online ordering and home delivery. This, in turn, is likely to have benefited Aurora Cannabis’ fiscal third-quarter performance.

The company might have gained from its low cost per unit production, thereby creating a solid brand across multiple pricing tiers while delivering robust and durably healthy margins.

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

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

It inked a strategic deal with Great North Distributors, Canada's first and largest national sales broker for legalized adult-use cannabis, in January 2021. In the same month, it entered into a strategic agreement with MedReleaf Australia. The companies signed a five-year supply contract, as a result of which MedReleaf will act as the exclusive supplier of Aurora's MedReleaf, CanniMed and Aurora brands in Australia.

These developments are expected to have contributed to the company’s medical cannabis sales in the to-be-reported quarter.

The recent launch of the product OG Chemdawg concentrate and a favorable market feedback are likely to have driven the company’s performance in the fiscal third 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. Notably, the first shipment of medical cannabis to Cantek was carried out recently. This development in turn, is likely to have aided the company’s performance in the to-be-reported quarter.

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 third quarter.

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

Here’s What the Quantitative Model Suggests

Our proven model does not predict an earnings beat for Aurora 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 +0.60%. 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 #5 (Strong Sell).

Stocks Worth a Look

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

National Vision Holdings, Inc. EYE has an Earnings ESP of +1.02% and a Zacks Rank of 1.You can see the complete list of today’s Zacks #1 Rank stocks here.

American Well Corporation AMWL has an Earnings ESP of +9.44% and a Zacks Rank #3.

Evolus, Inc. EOLS has an Earnings ESP of +3.36% and a Zacks Rank of 3.

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