Shares of cannabis companies across the board rose today as the industry’s top producer raised its revenue targets. Aurora Cannabis (NYSE: ACB) announced Tuesday that it issued guidance for its fourth fiscal quarter, a news development which sent the stock flying.
The company went on to say that it expects revenue between C$100 to C$107 million before taxes, as opposed to the C19.1 million seen from the previous year. Despite the fact that this figure is a little below analyst expectations, which was figured at C$112 million according to the FactSet consensus, investors were more than impressed that the company has seen such significant revenue growth in the first place.
“Our Q4 2019 guidance highlights Aurora’s continued leadership,” said Terry Booth, CEO of Aurora. “We set out to be best-in-class cultivators, and through carefully evaluated acquisitions, that vision continues to drive exceptional results today. We are the leader in cultivation capacity, production available for sale and revenues for cannabis in the Canadian medical and consumer markets,” said Aurora CEO Terry Booth. “Given ACB’s strong production output, we would look for this to translate to strong revenue growth in FY20, particularly as new product form factors come online in late-2Q (December) as well as continued brick and mortar rollout,” added top Wall Street cannabis analyst Vivien Azer.
Aurora Cannabis is the most widely owned Canadian cannabis stock in the markets right now and recently ended up surpassing Apple (NASDAQ: AAPL) as the most popular stock amongst millennials.
While other major companies have hit setbacks in some form or another, Aurora has remained strong, unlike some of its other competitors that have fallen out of favor due to scandals (such as the most recent affair with CannTrust Holdings).
Vivien Azer, who singled out Aurora as her top cannabis pick in the industry earlier this year, maintains her “outperform” rating on the stock. She added that these new figures prove the strength of Aurora’s fundamentals and that the revenue figures, while missing targets, wasn’t surprising given the poor level of monthly sales reported by Statistics Canada.
The country’s legalization of cannabis hasn’t been as smooth as expected, with major supply crunches drastically impacting original estimates for the amount of weed that would be sold. Regardless, Azer more or less doubled down on her opinion of the stock, saying that there was little to worry going forward.
In response to the news, shares of Aurora jumped as much as 16 percent over the course of the day before ending the day up 10 percent. The past few months have seen Aurora dip in stock price, falling from around $10 per share in April to trading at $6.90 at the time of writing.
Aurora Cannabis Company Profile
Aurora Cannabis Inc., headquartered in Edmonton, Canada, cultivates and sells medicinal and recreational cannabis through a portfolio of brands that include Aurora, CanniMed, MedReleaf, and San Rafael ’71.
Although the company primarily operates in Canada, Aurora has expanded internationally through medical cannabis exporting agreements or cultivation facilities in more than 20 countries. – Warrior Trading News
