RECOMMENDATION
We rate AURORA CANNABIS INC (ACB) a HOLD. The primary factors that have impacted our rating are mixed
- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either
a positive or negative performance for this stock relative to most other stocks. The company's strengths can
be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable
debt levels by most measures and solid stock price performance. However, as a counter to these strengths,
we find that we feel that the company's cash flow from its operations has been weak overall.
HIGHLIGHTS
ACB's very impressive revenue growth greatly exceeded the industry average of 4.7%. Since the same
quarter one year prior, revenues leaped by 222.6%. Growth in the company's revenue appears to have helped
boost the earnings per share.
ACB's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that
there has been very successful management of debt levels. To add to this, ACB has a quick ratio of 2.19,
which demonstrates the ability of the company to cover short-term liquidity needs.
The company's current return on equity greatly increased when compared to its ROE from the same quarter
one year prior. This is a signal of significant strength within the corporation. Compared to other companies in
the Pharmaceuticals industry and the overall market on the basis of return on equity, AURORA CANNABIS
INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
Net operating cash flow has significantly decreased to -$45.12 million or 1062.88% when compared to the
same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much
lower.
