E Aurora Stock Jumps 14% Despite Disappointing Q1 Financial Results

Aurora Cannabis Inc. (ACB), a constituent in the munKNEE Pure-Play Pot Stock Index, announced its Q1 financial results today for the period ended September 30, 2020. The highlights are as follows:

Q2 Financial Highlights (All results are presented in Canadian dollars - go here to convert into USD - and compared to the previous quarter.)

  • Total Net Revenue: almost unchanged at $67.8M
    • Consumer Cannabis Net Revenue: -3% to $34.3M
      • Adj. Gross Margin: increased to 38% from 35%
    • Medical Cannabis Net Revenue: +4% to $33.5M
      • Adj. Gross Margin: declined to 59% from 67%
  • SG&A: -24.7% to $44.3M
  • R&D: -66.2% to $2.6M
  • Adj. EBITDA: loss increased by 95.6% to $(57.9M)

Operational Highlights

  • Production Volume: +23%
  • Production Cost/g of Dried Cannabis: -27% to $0.89/g
  • Kilograms Sold: -3.6%
  • Average Net Selling Price/g of Dried Cannabis: increased 3.3% to $3.72/g
  • Capital Expenditures: -19.5% to $13.2M

Management Commentary

Miguel Martin, Chief Executive Officer, said:

  • "Our Q1 2021 results are transitional but do highlight successes across a number of diverse profit pools.
    • We remain the leader by revenue in the high-margin Canadian medical market,
    • our international medical business experienced more than 40% net revenue growth this quarter,
    • and our CBD brand Reliva is #1 ranked by Nielsen in the U.S. CBD sector. 
  • While we are not satisfied with our past performance in the growing Canadian consumer business,
    • we have a sense of urgency in the execution of our tactical plan to grow profitable market share
    • and have also taken action to improve our liquidity and strengthen our balance sheet.”

Stock Performance

While the Aurora stock price was DOWN 62.2% YTD, as of yesterday, it is showing considerable improvement of late going UP a dramatic 141.7% since the end of October. As can be seen in the chart below the Aurora stock price has jumped  +14% so far today (Monday). (Chart below is in Canadian dollars - go here to convert into USD).

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Lorimer Wilson 1 year ago Author's comment

Just emotion and a lot of wishful thinking. Aurora has been a major disappointment this year and still has not shown that it has what it takes to REALLY turn the corner. Let's see if it can maintain it for the balance of the year.

William K. 1 year ago Member's comment

Quite an interesting article. But I was hoping for a better explanation for the sudden growth. Or was it primarily motivated by emotions??

Anastasija Janevska 1 year ago Member's comment

I'd like to know this as well @[Lorimer Wilson](user:22485).