Bullish on Aurora Cannabis
One Analyst Sees Upside to Aurora’s Recent Moves – LPC
Seeking Alpha is bullish on Aurora Cannabis, stating that “good outweighs the bad” in a recent article. A new CEO (interim CEO Michael Singer), a recent plunge in stock price, and huge cost cuts all make Aurora a good buy. (Please see link below.)
“The amazing part is that Aurora Cannabis now trades below a market cap of $900 million while sales are running at a rate of $215 million,” the commentary states. “The company might have a difficult time reaching the current $300 million revenue target for FY21, but the stock becomes appealing on a valuation of about 3x sales estimates here.”
However, the article notes, one of the biggest difficulties of valuing any company is the constantly changing market.
“The biggest problem in the Canadian cannabis sector has seen a consistent inability to provide accurate financial targets as the market shifts. While the Canadian cannabis market continues to grow, the leaders in the sector have struggled to grow revenues.”
A growing retail market, especially in Ontario, should spur industry growth as well. Ontario passed 100 store licences in June and continues to expand quickly.
Aurora has seen its share of problems. Last year, an analyst noticed that it had dumped cannabis. The move came due to oversupply.
Has Aurora seen rock bottom? It’s quite reasonable to be bullish on Aurora, especially given its current valuations. It might be a sign that the Canadian cannabis industry is on the verge of turning around too.
This editorial content from the LPC News Team provides analysis, insight, and perspective on current news articles. To read the source article this commentary is based upon, please click on the link below. Are you part of the legal cannabis industry in Canada? Add Your Listing and get found by a qualified audience.
Click here to view full story at seekingalpha.com
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