Aurora Cannabis Inc., (NASDAQ: $ACB) headquartered in Canada, specializes in the medical cannabis sector. The company’s primary activities revolve around the production, distribution, and sale of cannabis-related products in both domestic and international markets.
Aurora Cannabis is divided into three segments: Canadian Cannabis, European Cannabis, and Plant Propagation. Within its adult-use brand portfolio, it features popular brands such as Aurora Drift, San Rafael ’71, Daily Special, Whistler, Being, Greybeard, and also CBD brands, Reliva and KG7.
Their medical cannabis lineup includes brands like MedReleaf, CanniMed, Aurora, and Whistler Medical Marijuana Co, along with international brands Pedanios, Bidiol, and CraftPlant.
The company primarily cultivates and manufactures its cannabis products in facilities located in Bradford, Ontario, Pemberton, British Columbia, and Odense, Denmark. Aurora Cannabis is dedicated to serving the global medical cannabis market, the recreational cannabis market, and the global hemp-derived cannabidiol (CBD) markets.
Aurora Cannabis stock forecast
On October 29, 2023, the current price of ACB stock stands at $0.620, indicating a year-long downtrend in the asset’s value.
According to the analysis of 2 Wall Street experts who have provided 12-month price forecasts for Aurora Cannabis in the past 3 months, the average price target is $0.81, with a maximum forecast of $1.00.
ROI of $1,000 Aurora Cannabis Investment From 2018-2023
It’s been nearly five years since Canada initially legalized recreational marijuana use. At that time, you might have been tempted to invest $1,000 in a leading cannabis producer like Aurora Cannabis (ACB 3.59%) to explore its potential amid promising growth prospects.
Unfortunately, it’s an understatement to say that things haven’t gone well for Aurora and many other Canadian producers since then. Here’s just how dire the situation has become: Aurora’s shares were trading at roughly $7 before the reverse split.
If you check Aurora’s stock price on September 4, 2018, some sources may indicate $81.60. However, this figure is adjusted for the significant reverse stock split the company executed in 2020, where they consolidated 12 shares into 1. The actual price at the close of that day was $6.80.
If you had invested $1,000 at that time, it would have bought you 147 shares of the cannabis producer. But as the stock price plummeted throughout 2019 and the beginning of 2020, Aurora struggled to maintain a stock price above $1, a critical threshold necessary to stay listed on the NYSE, the exchange where the stock was traded at that time. In May 2020, in an attempt to prop up the share price, Aurora implemented a 12-for-1 share consolidation. As a result, you would have received just 12.3 shares in exchange for your original 147.
At the stock’s present valuation, that initial $1,000 investment would now be worth approximately $10.62. Your investment would essentially be equivalent to the cost of a few cups of coffee at this point.
Aurora’s stock may be cheap, but it still isn’t a good buy
Aurora Cannabis is currently trading below its book value and at a meager multiple of only 1.5 times revenue. However, the stock has witnessed a substantial decline of approximately 99% over the past five years.
While its market capitalization is modest, around $330 million, it’s evident that the company’s valuation is exceedingly low. Despite management’s cost-cutting efforts, significant improvements are necessary to transform this business into an attractive investment opportunity.
But purchasing the stock might offer short-term profit potential due to broader developments in the cannabis industry, not directly linked to the company, it would essentially make you a speculator rather than an investor.
For those with a long-term investment horizon, making a case for buying this stock becomes challenging. The company still faces substantial hurdles, and the inherent risks within the cannabis industry are already considerable. There’s little justification to compound that risk by investing in Aurora Cannabis.
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.