We continue to closely watch the dynamic landscape of marijuana legalization in our ongoing green stocks series. Recent steps towards rescheduling marijuana from a Schedule I to Schedule III drug have lifted the profile of companies like Aurora Cannabis (ACB), a leading Canadian medical marijuana producer. The company’s elevated profile and solid quarterly results have helped lift the shares by over 20% in the past month. It presents an intriguing option for investors interested in cannabis stocks.
However, investors may want to hold off and revisit after next quarter’s earnings are announced for better insight into the company’s revenue and earnings growth.
Aurora Cannabis’ Global Growth
Aurora Cannabis is a player in the cannabis industry engaged in the production, distribution, and sale of cannabis and its derivative products. The company supplies a variety of both medicinal and consumer cannabis products,
Recently, Aurora Cannabis has secured a significant advantage with the legalization of marijuana in Germany. The company was one of the pioneering Canadian firms that established its presence in Europe. In Germany, it is one of three companies with permits for marijuana cultivation. With sophisticated production facilities certified by European regulators for good manufacturing practices, Aurora Cannabis can produce up to 1,000 kilograms of medical marijuana annually.
The company has recently received two licenses from the Federal Institute for Drugs and Medical Devices under Germany’s new Medical Cannabis Act, allowing for domestic cultivation and the expansion of product offerings to the German patient base. The company also has a dedicated R&D license for experimenting with up to seven additional novel cultivators at its local EU GMP facility in Leuna, Germany.
Aurora Cannabis’ Recent Financial Results & Outlook
The company recently posted financials for Fiscal Q1 2025. It reported a 12% year-over-year growth in net revenue of $83.4 million, primarily due to a 13% growth in global medical cannabis sales to $47.2 million and a 16% rise in the plant propagation business. However, the net revenue of consumer cannabis decreased by 10% due to the company’s decision to prioritize its high-margin international business.
Also, Net income turned from a net loss of $20.2 million in the prior year to a net income of $4.8 million in Q1 2025, with earnings per share (EPS) of $0.08, exceeding analysts’ expectations of -$0.13.
The company also generated a positive free cash flow of $6.5 million, contributing to the quarter-end cash position of approximately $182 million with zero debt.
Management has issued guidance for Fiscal Q2 2025, predicting net revenue and adjusted gross profits in line with historical performance while anticipating growth in Europe and Australia. However, free cash flow will likely be negatively impacted due to several significant annual and one-time cash payments typically occurring in Q2.
What Is the Price Target for ACB Stock?
The shares have been on a volatile ride, sporting a 1.86 beta while rebounding from a multi-year downward trend by posting a positive 35% return year-to-date. The stock trades near the middle of the 52-week price range of $2.84 – $11.51 and shows positive price momentum by trading above the 20-day (6.02) and 50-day (5.87) moving averages. The P/S ratio of 1.5x marks a relative premium to the Specialty & Generic Drug Manufacturers’ industry average of 0.87x.
Aurora Cannabis is rated a Hold overall, based on the recommendations and price targets recently issued by four analysts. The average price target for ACB stock is $7.27, representing a potential 12.54% upside from current levels.
ACB Stock in Summary
Aurora Cannabis has emerged as an intriguing play with a firm footing in the cannabis industry, a diverse catalog of both medicinal and consumer cannabis products, and recent advancements in overseas markets. Its latest financial results showed solid revenue and profit growth, yet significant payments in Q2 may impact its future performance. Aurora Cannabis has solidified its position as a company to watch as the dynamic cannabis market evolves in the year ahead.
