Aurora Forecast for the Long Term
If you’ve been following the market for marijuana stocks, you would likely have heard the name Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).
As one of the biggest marijuana companies in the world, Aurora Cannabis has quite a following. But because it is listed on the Toronto Stock Exchange (TSE), many Americans had to purchase its shares over the counter (OTC). Now, things are about to change.
Earlier this month, Aurora Cannabis announced that it had filed an application to list its common shares on the New York Stock Exchange (NYSE) under the ticker symbol “ACB.” (Source: “Aurora Cannabis Announces Application to List on the NYSE,” Cision, October 9, 2018.)
“Through our NYSE listing, Aurora joins an established group of mature global brands with improved access and exposure to an engaged international institutional investor audience,” said Aurora Cannabis CEO Terry Booth.
Aurora’s high-paced execution has made it one of the world’s leading cannabis companies. We have grown from being a licensed producer with a single facility, to a horizontality differentiated and vertically integrated global organization with a funded production capacity in excess of 500,000 kg a year, sales and operations on five continents, and a team of more than 1,500 employees.
The company expects its common shares to begin trading on the NYSE before the end of this month.
Aurora Cannabis Inc Stock Chart
Indeed, the listing of ACB stock on the NYSE is a big deal for the company.
While Aurora Cannabis is one of the most established players in the legal marijuana industry, trading over the counter may have limited its investor base. For instance, big institutional investors on Wall Street don’t always put their money in OTC stocks.
As such, Aurora Cannabis Inc’s listing on the NYSE will allow for improved liquidity and may also give the company more exposure in the financial media.
Now, keep in mind that Aurora Cannabis is already enjoying a nice rally while trading over the counter. Over the past three months, ACBFF stock surged a whopping 81%.
Chart courtesy of StockCharts.com
With this kind of stock price performance, it’s obvious that Aurora stock investors are looking for growth. So does Aurora Cannabis have the growing financials to support its soaring share price?
Well, the company reported its fourth-quarter 2018 earnings last month. In the quarter, which ended June 30, Aurora Cannabis generated $19.1 million of revenue, which more than tripled the $5.9 million generated in the year-ago period.
For the quarter, the company’s gross margin on medical cannabis came in at 74%, which was a 28% expansion year-over-year. (Source: “Aurora Cannabis Inc. Announces Results for the Fourth Quarter and 2018 Fiscal Year,” Cision, September 24, 2018.)
Notably, Aurora Cannabis had 43,309 actively registered patients in the fourth quarter, up 164% from the prior-year period.
For full-year fiscal 2018, the results were equally impressive. Aurora Cannabis’s revenue totaled $55.2 million for the year, up 206% from the prior year. The company expanded its gross margin on medical cannabis by 16% from fiscal-year 2017 to 65%.
Aurora Cannabis made 11 acquisitions in its 2018 fiscal year. For the year, the company’s production increased 85% to 5,632 kilograms. Its kilograms sold went up even more, by 111% to 5,022.
Is the NYSE Listing an IPO?
Very often, when we see a company listing its shares on the NYSE, it is doing an initial public offering (IPO). This happens when companies are offering their stocks to the public for the first time.
In the case of Aurora Cannabis, though, the company is already public, trading on the TSE. And American investors can already purchase its shares over the counter. Therefore, while this will be the first time that ACB stock trades on the NYSE, the listing is not considered an IPO.
Will Aurora Follow the TLRY Rally?
Speaking of cannabis stocks that trade on major U.S. stock exchanges, Tilray Inc (NASDAQ:TLRY) is another marijuana producer and processor based in Canada. The company completed its IPO on July 19, 2018, making it the first weed stock IPO on the Nasdaq.
TLRY stock’s performance since its IPO has been nothing short of impressive. Tilray closed at $21.10 per share on its first day of trading. Now it trades at $160.45 per share, marking a staggering gain of 660%!
Tilray Inc Stock Chart
Chart courtesy of StockCharts.com
As I mentioned earlier, Aurora Cannabis is already a publicly listed company, so its listing on the NYSE, while certainly a welcome move for U.S. investors, probably won’t bring as much hype as Tilray’s IPO.
For investors looking for the Aurora Cannabis stock forecast, keep in mind that weed stocks are having a tremendous rally right now. But as we have seen plenty of times, when the market enters a correction, there could be a tendency for investors to first sell the stocks that went up a lot.
That being said, the upcoming listing of ACB stock on the NYSE will likely bring the company to a much broader audience. With improved liquidity and investor awareness, the best could be yet to come for Aurora Cannabis Inc.