Aurora Cannabis Stock Blues
One of the most disappointing stock market performers in 2018 has been Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB). The stock’s value is down over 30% year-to-date, and many of the company’s big, bold moves have fallen flat—at least for now.
So what does that mean for the Aurora Cannabis stock forecast? Short-term, it’s not so great. Long-term, things are still looking bright for Aurora.
The difference in those two projections has everything to do with the state of the legal marijuana industry.
You see, Aurora has been on an acquisition spree this year, gobbling up companies left and right, culminating in its multi-billion dollar buyout of MedReleaf Corp.
The move brought great success to MedReleaf stock, but did little to bolster the Aurora Cannabis stock price. Furthermore, ACBFF stock has been on a downturn ever since Aurora completed the acquisition, making it one of the weaker performers in recent weeks.
This was obviously not the intended outcome of the MedReleaf deal, but I think it’s more a reflection of the investor mindset around marijuana stocks at the moment than a damning condemnation of the Aurora-MedReleaf deal.
Chart courtesy of StockCharts.com
Aurora has been buying other cannabis companies at a time when the industry is largely believed to be overvalued. I’ve covered that debate at length and, long story short, I firmly believe that these companies are in fact undervalued when you take a step back and examine the long-term potential of the global marijuana market.
At the moment, yes, these companies are highly overvalued, considering the available legal markets. That perspective has contributed to the weakness of the marijuana industry as a whole, and ACBFF stock more specifically.
Short-term, the Aurora Cannabis stock forecast is bleaker than most, I’d say. While it’s still likely to see a big uptick when Canadian marijuana legalization hits, I believe that it will perform at a lower level compared to its competitors like, say, Canopy Growth Corp (NYSE:CGC).
Long-term, however, things begin to improve. The forecast looks brighter the further out you project. You see, while the recent acquisitions can be deemed smart or foolish depending on your perspective, one thing that cannot be denied is that Aurora now has massive production capacity.
The company has grown its ability to become a chief marijuana supplier to Canada and many other markets across the globe. This will be invaluable to the company’s long-term projection, when hype gives way to hard numbers.
If Aurora can capitalize on its increased production capabilities, I have a strong feeling that ACBFF stock will be very successful for years to come.
The Aurora Cannabis stock forecast in 2018 is not ideal.
The legal marijuana industry has been in an overall decline for much of the year, and ACBFF stock has been hit harder than most.
But the company has made moves that are positioning it for great success down the line.
The thing that Aurora has to focus on, therefore, is hooking up supply deals in order to turn its newfound production capacity into real gains. If it can do that, the long-term viability of Aurora Cannabis stock will be strong.