Aurora Stock Price Trajectory
One of the top companies in the marijuana industry, Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB), recently released its Q2 earnings report, and weed stock enthusiasts will be happy to know that things are looking good for ACB stock.
The Aurora earnings report showed double-digit boosts in several key metrics, while costs were reduced and the company otherwise showed nice progression from the last quarter.
The Aurora stock price jumped about 1.5% at the end of trading last week, but, while the Q2 earnings report didn’t spur on a substantial gain in the near term, several key figures show that the company is in a strong strategic position.
Aurora revenue catapulted upward, hitting CA$11.7 million, up from CA$8.2 million the previous quarter. That represents a 41.8% jump in revenue in a single quarter. (Source: “Aurora Announces Q2 Fiscal 2018 Results,” Cision, February 8, 2018.)
These are the types of numbers that pot stock lovers have come to love, and the massive rate of expansion is why so many people are bullish on the industry long-term, even through the shaky ups and downs that an emerging market often entails.
Revenue from a year ago had leaped skyward by over 200%, again speaking to the powerful growth that Aurora is currently undergoing. Aurora Cannabis sales increased by over 30% in the quarter as well, with the company’s cannabis production jumping by nearly 20%.
In another show of good news, the company was able to reduce the cash cost of its sales per gram by about 20%.
All this points to a company that is maturing nicely, growing in all the right areas while getting ready for marijuana legalization in Canada this summer.
Aurora product sales are likely to continue to see impressive growth since the company saw an increase of more than 12% in active registered patients.
All things considered, the Aurora stock price is likely to get a nice boost in the near future from its impressive financial report, with strong numbers speaking to a company on the rise.
German Exports, Pedonios GmbH Acquisition, and Aurora Stock Forecast
The Q2 financial report isn’t the only reason to be high on the Aurora stock price; several of the company’s latest moves have put it in a strong position, relative to the market.
Aurora recently bought a minority stake in Liquor Stores N.A. Ltd
(OTCMKTS:LQSIF, TSE:LIQ). Liquor Stores is set to receive CA$103.5 million from Aurora for about 19.9% equity stake, with Aurora having the option to increase its stake up to 40%.
Liquor Stores is essentially making a preemptive strike on the coming legalization in Canada. Rather than see a good chunk of its business disappear as a subset of consumers forgoes alcohol for pot, Liquor Stores is looking to sell cannabis at its stores and prevent any sort of sizable customer falloff.
It’s a heady move from both Liquor Stores and Aurora, which gets another outlet through which to peddle its wares.
But, while the Liquor Stores buy does put Aurora in a better position to fully capitalize off of the incoming Canadian marijuana legalization this summer, the truly impressive move by Aurora has to do with another country and continent.
Aurora’s Pedanios GmbH acquisition is one of the strongest plays by a marijuana company in recent weeks, because it puts Aurora in line to take advantage of a young, but burgeoning, European market. By acquiring the German marijuana company, Aurora has landed a foothold in Europe’s most populous state at a time when the marijuana industry is just getting off the ground in that country.
Aurora wrote in its Q2 financial earnings report that it had received all the required permits to import medical cannabis production to Germany via Pedanios, which has already supplied cannabis to over 2,000 pharmacies, making it the largest European Union (EU) distributor of cannabis.
The German exports are what I am most personally impressed by, aside from the financial numbers.
While revenue growth and patient increases are all well and good, the company’s global mindset is key to sustaining long-term growth and separating it from the competition.
The European market stands to be one of the most lucrative marijuana buyers of the future, with a more lax attitude toward the drug compared to the U.S., while still having hundreds of millions of potential customers ready to buy.
While everyone in the marijuana industry would love for the U.S. to catch up in terms of pot legislation, the rhetoric in America is simply more charged when it comes to the issue of marijuana versus its European counterparts.
Which isn’t to say there is no pushback in Europe against marijuana. But that pushback is softer in comparison to the United States. Not to mention that the state system in the U.S. makes legalization a slower process, by virtue of the federal and state governments bouncing responsibility from one level of government to the next.
Europe, on the other hand, has far more federally-centered governments, allowing for quicker moves in the realm of marijuana.
As such, it makes sense for companies to target European markets in order to gain footholds in what promises to be an extremely lucrative region for pot in the years to come.
The Aurora stock forecast is looking bright. With good numbers in its most recent financial report, coupled with strong business moves that are future-oriented, Aurora has all the makings of a great year in its stock forecast.