1.4800 -0.03 (-1.99%)
Pre-Market: 8:54AM EST
|Bid||1.4700 x 46000|
|Ask||1.5000 x 41800|
|Day's Range||1.4900 - 1.5900|
|52 Week Range||1.4300 - 10.3200|
|Beta (5Y Monthly)||1.52|
|PE Ratio (TTM)||6.99|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
The increasing usage should spur clinical research on older consumers, researchers at New York University say, because “older adults are especially vulnerable to potential adverse effects from cannabis.”
Needham initiated coverage of Aurora Cannabis Inc. on Tuesday with a hold rating and $1.50 price target. Analysts Matt McGinley and Evan Greenblatt said the company has established itself as a low cot producer of cannabis, but remains deeply unprofitable and has to scale back its operating structure while attempting to grow revenue. "We expect restructuring to produce an entity capable of generating positive EBITDA by F1Q21, but any shortfalls in cost reduction or market development places the company at liquidity risk in 2H20," the analysts wrote in a note to clients. The Canadian cannabis market is structurally impaired with a shortage of retail stores clashing with excess production capacity, price pressures from the black market, challenging branding rules and limited signs that Cannabis 2.0 will have a meaningful impact in the first half. "We are optimistic that Canada will work through some of these issues over the next 2-years, but don't expect to see many of the 300 LPs in Canada make it to that point," the Needham analysts wrote. Aurora shares rose 2.6% premarket in a rebound from Monday's steep selloff across all markets. The stock has fallen 79% in the last 12 months, while the ETFMG Alternative Harvest ETF has fallen 57% and the S&P 500 has gained 15%.
Cowen downgraded Aurora Cannabis Inc. along with Tilray Inc. and Sundial Growers Inc. on Monday with analysts becoming increasingly cautious on the outlook for Canadian licensed producers.
Along with their major reorganization announcement, Aurora Cannabis (ACB) announced plans to create a value brand called The Daily Special. A big part of avoiding the stock over the last year centered on some irrational plans with cultivation targets. The new value brand has some questionable plans while the company is still wildly building inventory levels. While the reorg plans appear logical, investors need to question the execution potential of a company with the previous Chairman and CFO still running the company.Value Prices Too High On the FQ2 earnings call, Aurora detailed a market shifting to value brands. The company lists the market share for cannabis selling for less than C$9 per gram as having grown from 2% over the Summer to 17% now. During the period, premium weed lost the majority of the market share.Using a hockey term considering this a Canadian LP, the question is whether Aurora is actually skating to where the market is headed. HEXO (HEXO) created a value brand called “Original Stash” back over the summer with a price target of C$5 per gram and the illegal market is already down around this pricing level.In Q4, the price for illegal weed according to Statistics Canada was already down at C$5.73 per gram while legal prices were up at C$10.30 per gram. The concept of value brand weed selling for up to C$9 per gram still appears far off target considering cannabis prices rose during Q4.The real question is whether Aurora is willing to aggressively compete with the illegal sources and other cannabis companies like HEXO.Too Much InventoryThe troubling part here is the levels of inventory held by Aurora following several quarters of production far in excess of sales. Even despite this issue, the company forecasts maintaining annual production of 150,000 kg, or the equivalent of 37,500 kg of production each quarter.The company ended FQ2 with a listed inventory value of C$217 million, up from C$179 million in the prior quarter. Aurora produced around 50,000 kg in excess of production in the last two quarters alone.For September, Aurora produced 41,436 kg of cannabis while only selling 12,463 kg. For the December quarter, the Canadian cannabis company produced 30,691 kg of cannabis while only selling 9,501 kg. Note, the amount sold declined sequentially as the company dumped less cannabis into the wholesale market.With so much extra weed in inventory and the company still aggressively growing new weed at a cash cost below C$1 per gram, Aurora should undercut the illegal market here. The company recently reported a quarterly loss of C$80 million so the company needs some aggressive moves to capture market share while cutting costs.With a targeted C$45 million operating expense base going forward, Aurora doesn’t need as much revenue to turn EBITDA positive.Consensus VerdictWhat does the Street make of Aurora's prospects? 1 Buy, 11 Holds and 3 Sell ratings coalesce into a Hold consensus rating. However, with an upside potential of over 30%, the stock's consensus price target stands at $2.07. (See Aurora's stock analysis on TipRanks)TakeawayThe key investor takeaway is that Aurora Cannabis still has a Canadian market with a lot of positive catalysts to play out in 2020, but the company lacks the financial discipline for an investment. The stock trades at $1.50 for a reason and the lack of new executive leadership makes Aurora too big of a gamble to buy on any weakness. Investors should prepare for the company to struggle with the massive cuts to the operations spilling over into weak revenues.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Edibles, beverages and other “cannabis 2.0” products are the future of weed. The U.S. market is almost split 50-50 by flower and oil sales, and Valens is forecasting that oil’s share will reach 75% or more, said Knight, the extraction company’s executive vice president for corporate development and capital markets. “I think 2.0 is really the future of cannabis,” he told moderator Jim Kirsch of Alliance Global Partners during a panel discussion.
Cannabis stocks fell as Cowen downgraded Aurora Cannabis and Tilray but kept Canopy Growth as its only "outperform" pot stock.
Trulieve Cannabis Corp (OTC: TCNNF ) opened its 45th location in Stuart, Florida Feb. 15 and has 1.7 million square feet of cultivation space. It’s a long way from Trulieve’s beginnings five years ago ...
Cowen analyst Vivien Azer downgraded Tilray and Aurora Cannabis to Market Perform from Outperform. She also downgraded Sundial Growers to Market Perform.
Cowen downgraded Aurora Cannabis Inc. , Tilray Inc. and Sundial Growers Inc. to market perform from outperform on Monday, and said it's increasingly cautious on the outlook for cannabis in Canada. Analyst Vivien Azer said the headwinds that have rocked the sector from pricing to too few stores to inventory do not appear to be easing and Cannabis 2.0, the second phase of legalization involving edibles and other derivatives, are unlikely to be a panacea. Canopy Growth Corp. , the market leader, is now Azer's only outperform rate stock among Canadian licensed producers. "After already having lowered our 2020 TAM a cumulative 27% since January 2017, we are now forecasting C$3.5 bn ($2.6 billion) in legal market cannabis sales (including medical cannabis and taxes), which is 32% below our prior forecast," Azer wrote. "More narrowly, we expect of C$2.5 bn of adult use net sales compared to the current run-rate of C$1.8 bn." Aurora's U.S.-listed shares were down 6% premarket, while Tilray was down 7% and Sundial was down 2.6%.
Cantor Fitzgerald said Monday it is sticking with its overweight rating on troubled Canadian cannabis company Aurora Cannabis Inc. because it expects the Canadian licensed producers to rerate in the year ahead. In a note to clients, analyst Pablo Zuanic said he's comfortable with the recent actions taken by the company to shore up its balance sheet and profit margins. While it may take time for the company to regain investor confidence, its recent underperformance versus peers seems overdone. The stock has fallen 25% in the last 30 days, versus an 8% decline for the overall group and is down 64% in the last 90 days compared with a 39% decline for the overall group, he wrote. Zuanic highlighted two metrics that make him optimistic; Aurora's recreational sales in Canada are second only to those of market leader Canopy Growth Corp. over the last five quarters; and it is one of just five companies that have been able to maintain new recreational prices above $5.20 a gram. The analyst raised his 12-month price target on Aurora stock to C$3.80 ($2.86) from C$3.75. "We do not factor optionality upside from the appointment of a new high-profile CPG CEO and or from a CPG partnership, but certainly that would imply greater upside," he wrote. Aurora's U.S.-listed shares were down 6% premarket and have fallen 76% in the last 12 months. The ETFMG Alternative Harvest ETF has fallen 55% in the same period, while the S&P 500 has gained 20%.
CALGARY , Feb. 21, 2020 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (HITI.CN) (HITIF) (2LY.F), an Alberta -based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, today announced that it has closed the acquisition of a retail cannabis store (the "Transaction") currently operating in Tisdale, Saskatchewan (the "Tisdale Store") as licensed by the Saskatchewan Liquor and Gaming Authority (the "SLGA"). The consideration paid to acquire the Tisdale Store was $200,000 in cash, $500,000 in the form of a promissory note due six months from the time of closing of the Transaction and 5,000,000 of common shares of the Company.
Since peaking in just short of a year ago, most cannabis stocks seen nothing but red. Aurora Cannabis (NYSE:ACB) stock features in the list of worst performers. Shares currently trade at $1.68, down 83% from a 52-week high of $10.32 in mid-March 2019. While a short-term technical bounce is likely from oversold levels, I remain bearish on Aurora stock.Source: Shutterstock Before talking about some key points in Q2 2020 results and other reasons to remain bearish, the following point is worth noting -- Aurora Cannabis expects the total size of the cannabis industry at $200 billion. The company has an annual production capacity of 150,000 kg and is operational in more than 20 countries.These numbers seem big, but the stock has crumbled. So it's important to understand the reason for this divergence.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMy view is as follows: The marijuana industry is still at an early stage of growth and the inflection point is still years away. For cannabis companies and investors, this reality is gradually sinking-in.Aurora Cannabis is likely to see years of cash burn through investment in medical research and significant marketing expenses. The same holds true for other cannabis companies.The coming quarters and years will not decide the market leader. It will decide on the companies that eventually survive. For Aurora Cannabis, deciding to eliminate 17% to 18% of its workforce is a survival decision. * 7 Exciting Stocks to Buy for Aggressive Investors More such decisions are expected in the coming quarters that target to arrest cash burn. A very likely step is to focus on few countries than target multiple regions as it increases the cost. Important Observations From Q2 2020 ResultsAurora Cannabis recently announced Q2 2020 results and there are multiple points that back a bearish view on the stock.For Q2 2020, Aurora reported revenue of 56 million CAD ($42.2 million), which was just 3.4% higher than Q2 2019. Further, EBITDA level loss was 80.2 million CAD for Q2 2020 as compared to 44.7 million CAD for Q2 2019.Even with operational presence in multiple markets, top-line growth is disappointing. To add to the woes, cash burn has accelerated.For the first half of 2020, Aurora reported cash used in operations of 229.6 million CAD as compared to cash used of 132.9 million CAD in the comparable period for 2019.With a cash buffer of just 156.3 million CAD, Aurora Cannabis will soon require funding. Therefore, more dilution of equity is coming in 2020.While I am making a year-on-year comparison, it is worth noting that revenue for Q2 2020 declined by 26% from Q1 2020. For high growth industries, sequential revenue decline is a disappointment and underscores my view that inflection point is still years away.Furthermore, medicinal cannabis and consumer cannabis net revenue also saw a sequential declined in Q2 2020. Aurora has been talking about the launch of Cannabis 2.0 products, with 23 SKUs -- including vapes, concentrates, gummies, chocolates, baked goods and mints -- introduced in December 2019. The coming quarterly results will be critical as it will provide insights on the impact of new product launch. * 7 'Strong Buy' Stocks With Over 50% Upside Potential Even in the medicinal cannabis segment, growth is years away. Aurora is doing the right thing by focusing on clinical research. The research areas include pain, epilepsy, anxiety, cancer, and neuro-degeneration, among others. Only when clinical research establishes the benefits and the FDA gives an approval, will Aurora see growth in medicinal cannabis. Last Word on Aurora StockIn the coming quarters, Aurora Cannabis is likely to be a leaner organization with a relatively conservative growth strategy. This will help in conserving cash for an extended period of slow growth.According to the U.S. National Institute of Drug Abuse, cannabis has several negative effects on health. Just as an example, brain development and memory is effected. These observations can translate into a regulatory headwind for recreational cannabis in the long-term.Overall, there are multiple challenges to navigate and that makes Aurora stock unattractive even after a sharp decline. There can be short-term trading opportunities from oversold levels, but ACB shares are far from being a core portfolio holding.Faisal Humayun is senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Failing Tech Stocks to Disconnect From Now * 5 Ideal Dividend Stocks for New Investors * 4 Stocks to Buy No Matter Who Wins the 2020 Election The post Even Under $2, Aurora Stock Remains Unattractive appeared first on InvestorPlace.
Tim Seymour, CIO of Seymour Asset Management and co-host of CNBC's "Fast Money," joined Benzinga’s PreMarket Prep on Thursday , ahead of his appearance at the Cannabis Capital Conference Feb. ...
Canopy Growth Corp.’s U.S.-listed shares rose Monday, extending gains made Friday after the Canadian cannabis company surprised investors with better-than-expected earnings.
The latest earnings report of Aurora Cannabis (ACB) came in as expected, with results confirming a weak quarter for the company.While the worst appears to be over, a major problem is the lack of clarity in Canada especially, concerning what the actual demand for cannabis is.In this article we'll examine why this will keep the future outlook of Aurora Cannabis and its Canadian peers in the dark, and what it means to long-term investors.Lack of demand discoveryAnyone that understands why socialism never has worked, knows that the primary reason is the resultant lack of price discovery. Without that, economies aren't able to operate in an efficient manner.Something similar is happening in the Canadian cannabis market in regard to demand discovery. What I mean by that is the horrifically slow licensing process that has failed to come close to meeting Canadian demand, has left a vacuum in regard to demand discovery that will take as long as two years to be solved.By demand discovery I mean the lack of retail outlets that give investors an idea of what the actual demand for marijuana in Canada is. There are thoughts and projections in that regard, but that is only guessing at this time because of the inability of producers to sell at meaningful levels into the large provinces of Ontario and Quebec, which together represent over 22 million people as of 2019.Until that changes, it's only guesswork as to the potential demand residing in those two large provinces. It can't be projected based upon sales in the smaller provinces because some of them generate a lot more sales per population than the others do.How long will it take?How long will it take to achieve Canadian demand discovery? It depends on the commitment of the two provinces, and if they can perform better at streamlining the process.In the case of Quebec, it has stated in the past it isn't in a hurry to roll out new stores. That doesn't mean they won't improve on its lack of urgency, only that it appears it won't accelerate the process because of market pressure.I think that could change, but there's no doubt of the two, Ontario has a much higher sense of urgency than Quebec has, and that's good for Aurora Cannabis, and the remainder of its peers based in Canada.It looks like Ontario, once it starts expediting the licensing process, will continue to do so until the province has enough cannabis retail outlets to meet market demand. There's a long way to go before it reaches that permeation level.Consensus VerdictMost of Wall Street is surveying the embattled cannabis giant from the sidelines, with TipRanks analytics demonstrating ACB as a Hold. Based on 15 analysts polled in the last 3 months, 2 are bullish on the stock, 10 are sidelined, while 3 are bearish. However, the 12-month average price target stands at C$3.05, marking a nearly 40% upside from where the stock is currently trading. (See Aurora stock analysis on TipRanks)ConclusionAurora Cannabis will continue to struggle until 100s of more Canadian stores are opened for business. The last eight months of 2020 are important in that regard because it doesn't look like things will pick up for the licensing process until April 2020.Once that kicks into gear though, it should give a much clearer picture of what Canadian demand really is. In this case, because of it being in Ontario, and secondarily Quebec, we can get a clearer idea of what demand will be after several quarters of these new stores being opened.That points to the latter part of 2020, or the first half of 2021.As this happens, Aurora Cannabis will be given a chance to sell into, not only a larger retail market as measured by the number of retail outlets that are operational, but also presumable sell a significant amount of derivatives that command higher prices and wider margins.Once demand discover for the Canadian cannabis market is visible, we can then look at how Aurora Cannabis can grow under that specific sector environment. We'll also be able to see what its potential growth trajectory is as this unfolds.Again, for now this is all guesswork, but within a year or a little longer, these demand issues should be result in relationship to visibility, and assuming the provinces come through with 100s of more stores in the first half of 2021, we'll know what the real potential of the legal market is in Canada, and how much market share Aurora can take against its legal and illegal competitors.Last, on the illegal side of the business, we should see that start to shrink as customers are provided more retail options to buy in, especially new customers that I think are waiting and willing to give legal cannabis a try.All of this should benefit Aurora Cannabis. We'll have to wait to see to what degree by probably another twelve to eighteen months.In the near term, I think Aurora could start to press toward the C$2.00 per share mark, unless there is a negative catalyst that emerges.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Are marijuana stocks on U.S. exchanges a good buy now? The marijuana industry gets a lot of hype, but look past the smoke and analyze pot stocks on their fundamentals and technicals.
/R E P E A T -- High Tide Announces Agreement to Sell KushBar Assets to Halo Labs for $12 Million/
British Columbia Investment Management, which manages the province’s public assets, dramatically increased its holdings in those stocks in the last quarter of 2019.
A strong week for cannabis closed with surprising quarterly results from Canopy Growth Corporation (NYSE: CGC ) (TSX: WEED) Friday, with fiscal third-quarter net revenue of CA$123.8 million ($93.5 million), ...
The largest Canadian marijuana companies have less than a year’s worth of cash left on average, according to a new study.
Canopy Growth stock roared higher Friday and sparked a broad rally among cannabis stocks, after a better-than-expected earnings report bolstered sentiment on the beaten-down sector.
Canopy Growth Corp. reported earnings early Friday that gave investors a few reasons to cheer: In short, it wasn’t a total disaster.