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Aurora Cannabis stock plunge 18% on bleak revenue outlook

Aurora Cannabis stock plunge 18% on bleak revenue outlook
Justinas
Baltrusaitis
Updated: 12 Dec, 2020
2 mins read

Aurora Cannabis stock (NYSE: ACB) price lost 18% of value in post-market trading despite beating revenue and earnings estimates for the fourth quarter. The shares of Canadian cannabis producer sink due to lower than expected revenue outlook for the first quarter of 2021. Investors have been showing concerns over the declining trend in revenues.

Its fourth-quarter revenue of $72.11 million topped consensus estimate by $0.62 million, but revenue fell 4.5% from the past year period. Its medical cannabis revenue jumped 4% from the past year period while consumer cannabis revenue dropped 9% year over year.

ACB Aurora Cannabis Inc. daily Stock Chart
Aurora Cannabis stock performance. Finviz chart

Moreover, the company expects the declining trend to extend into the next year. It expects first-quarter revenue to stand in the range of $60 to $64 million, down from the previous quarter revenue of $72 million.

On the positive side, Aurora Cannabis has been successfully moving its business towards profitability. The company expects to generate positive EBITDA in the second quarter of 2021. Its EBITDA loss stood around $34.6 million in the fourth quarter of 2020 and $50.4 million in the third quarter.

“Our Q4 demonstrated progress in the rationalization of SG&A and cash burn along with continued leadership in both Canadian and international medical. However, Aurora has slipped from its top position in Canadian consumer, a market that continues to support material growth and opportunity,” stated Miguel Martin, Chief Executive Officer of Aurora.

It’s selling, general and administrative expenses dropped by $11.2 million to $67 million in the fourth quarter. The company plans to slash its expenses in the following quarters to improve its margins.

It has also been aggressively working on lowering the cost of production. Its cash cost to produce per gram of dried cannabis dropped to $0.89 in the fourth quarter, down sharply compared to $1.22 in the previous quarter.

Aurora Cannabis stock price is currently trading around $6, slightly above from 52-weeks low of $5 a share. Aurora Cannabis stock has lost almost 87% of value in the last twelve months.   

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Justinas Baltrusaitis
Author

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.