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 also find weaknesses including weak operating cash flow and poor profit margins.
HIGHLIGHTS
ACB's very impressive revenue growth greatly exceeded the industry average of 0.6%. Since the same
quarter one year prior, revenues leaped by 259.7%. 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 0.07 and is currently below that of the industry average, implying that
there has been very successful management of debt levels. Along with this, the company maintains a quick
ratio of 5.44, which clearly demonstrates the ability to cover short-term cash needs.
The gross profit margin for AURORA CANNABIS INC is currently lower than what is desirable, coming in at
28.62%. It has decreased significantly from the same period last year. Despite the weak results of the gross
profit margin, the net profit margin of 355.40% has significantly outperformed against the industry average.
Net operating cash flow has significantly decreased to -$69.07 million or 1288.56% when compared to the
same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much
lower
