Recently shares of Aurora Cannabis were destroyed after the company executed a 1-for-12 reverse stock split but came back roaring on strong third quarter financial results.
The troubled marijuana company reported stronger-than-expected revenue for the latest quarter earlier this month with sales soaring amid the coronavirus pandemic.
The stock saw a gain of about 16% in after-hours trading after the marijuana producer reported results after the bell.
In the fiscal third quarter ended March 31st, Aurora reported revenue that totaled C$75.5 million, up 16% from C$65.1 million a year ago. FactSet analysts had forecast sales of C$66.7 million for the latest quarter.
The company didn’t report net income/loss in its news release while analysts forecast a loss of 77 cents a share.
“I am … pleased that our third quarter 2020 financial results were in-line with our expectations, and that we remain firmly on track with the cost-savings and capex goals we detailed during our business transformation plan in February 2020,” Aurora CEO Michael Singer stated.
Recently Cowen analyst Vivien Azer wrote, “With one of the largest production capacities among the LPs, ACB has gotten off to a solid start in the Canadian adult use cannabis industry. However, cost overruns and missed targets have resulted in notable management turnover and the need to refinance debt with strict mandates around profitability.”
Despite the revenue beat and shares moving higher, Aurora Cannabis’ stock has dropped over 60% in the last three months.
Ladenburg Thalmann analyst Glenn Mattson recently remarked, “We think ACB can become a solid cash-flow generator simply from the Canadian operations and, with a strong market position in Canada, the company can create significant value from here based on this one market.”
He added, “We do think that it will look to expand into the U.S. but not until federal legality is more clear.”
Disclaimer: We have no position in Aurora Cannabis Inc. (NYSE: ACB) and have not been compensated for this article.