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Aurora Cannabis (TSE:ACB)
TSX:ACB
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Aurora Cannabis
(TSX:ACB)
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Rating:52Neutral
Price Target:
C$5.50
▲(15.06% Upside)
Action:ReiteratedDate:02/06/26
The score is held back primarily by weak cash-flow quality and poor technical momentum (price below key moving averages with bearish MACD). Offsetting factors include an improving operational trajectory with strong gross margins, a relatively manageable balance sheet, and a constructive earnings outlook centered on growing higher-margin global medical cannabis.
Positive Factors
Medical revenue & international share
A predominantly medical revenue base (81% of net revenue) with double-digit medical growth and strong international execution provides durable, higher‑margin demand. Leadership in key markets diversifies revenue away from commoditized Canadian adult-use cycles and supports steadier cash flows.
High and improving gross margins
Sustained high adjusted gross margins (62% consolidated, 69% medical) driven by medical mix and GMP manufacturing underpin recurring profitability potential. Strong gross margins provide buffer against pricing pressure and fund reinvestment, making operating improvements more durable over 2–6 months.
Strong liquidity and low cannabis debt
A sizable cash balance with no cannabis-related debt and an available ATM enhances financial flexibility to fund expansion, M&A or weather cash volatility. Manageable leverage (per balance sheet improvement from FY2023) reduces refinancing risk and supports execution on the medical-first strategy.
Negative Factors
Negative trailing cash generation
A multi‑year pattern of negative TTM operating cash flow and materially negative free cash flow creates a persistent execution risk. Even with recent operational gains, continued negative cash conversion could force dilutive capital raises or limit organic investment unless positive free cash flow stabilizes.
Operating profitability not yet durable
Despite strong top-line momentum and gross profits, the business still reports net losses and negative operating profit, indicating earnings volatility. Reliance on adjusted EBITDA and one-off items means reported profitability lacks the consistency needed to assure sustainable returns to shareholders.
Cost and segment volatility (propagation & SG&A)
Significant margin compression and write-offs in plant propagation, coupled with rising SG&A to support international expansion, reduce operating leverage and highlight execution risk. Persistent cost pressure or further one‑offs could erode the high gross margins and delay durable operating profitability.
Aurora Cannabis (ACB) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$282.98M
Dividend YieldN/A
Average Volume (3M)426.04K
Price to Earnings (P/E)44.9
Beta (1Y)1.71
Revenue Growth23.87%
EPS Growth-19.57%
CountryCA
Employees1,073
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.03
Shares Outstanding56,709,423
10 Day Avg. Volume322,691
30 Day Avg. Volume426,036
Financial Highlights & Ratios
PEG Ratio-2.12
Price to Book (P/B)0.61
Price to Sales (P/S)1.01
P/FCF Ratio-121.14
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$9.17Price Target Upside91.85% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)-1.01
Revenue Forecast (FY)C$379.91M
Aurora Cannabis Business Overview & Revenue Model
Company DescriptionAurora Cannabis Inc. produces, distributes, and sells cannabis and cannabis derivative products in Canada and internationally. It also engages in facility engineering and design, cannabis breeding, research, production, derivatives, product development, wholesale, and retail distribution activities. The company produces various strains of dried cannabis, cannabis oil and capsules, and topical kits for medical patients. It also sells vaporizers; consumable vaporizer accessories; and herb mills for using CanniMed herbal cannabis products, as well as grinders and vaporizer lockable containers. In addition, the company engages in the development of medical cannabis products at various stages of development, including oral, topical, edible, and inhalable products; and operation of CanvasRX, a network of cannabis counseling and outreach centers. Further, it provides patient counselling services; design and construction services; and cannabis analytical product testing services. The company's brand portfolio includes Aurora, Aurora Drift, San Rafael '71, Daily Special, AltaVie, MedReleaf, CanniMed, Whistler, Woodstock, and WMMC. Aurora Cannabis Inc. is headquartered in Edmonton, Canada.
How the Company Makes MoneyAurora Cannabis generates revenue primarily through the sale of cannabis products, which include both medical and recreational offerings. The company operates several production facilities that adhere to strict quality and regulatory standards, allowing it to supply products to various Canadian provinces and international markets. Key revenue streams include direct sales to consumers through retail outlets, online sales, and wholesale distribution to licensed retailers. Additionally, Aurora has formed significant partnerships with other companies and organizations to enhance its product offerings and expand distribution channels. The company also generates revenue through its investments in cannabis-related businesses and by leveraging its expertise in cultivation and production to provide consulting services to other cannabis enterprises.
Aurora Cannabis Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jun 18, 2026
Earnings Call Sentiment Positive
The call emphasized material progress: top-line growth driven by a focused medical-cannabis strategy, strong high-single-digit revenue growth, healthy adjusted gross margins (62% consolidated; 69% medical), record international execution (Germany, Poland, Australia), positive adjusted EBITDA and free cash flow, and a conservative balance sheet with $154M cash and no cannabis-related debt. Management also announced strategic moves (exiting select Canadian consumer markets, divesting plant propagation stake, and an ATM up to $100M) designed to reallocate resources to higher-margin global medical markets. Offsetting this are deliberate shrinkage in the lower-margin Canadian consumer business (48% revenue decline by design), significant margin deterioration and write-offs in the plant propagation segment, higher SG&A to support international growth, modest YoY decline in adjusted EBITDA, and lower free cash flow versus the prior year. Overall, the operational and financial positives and the clear strategy to concentrate on a higher-margin global medical opportunity outweigh the operational headwinds and one-time/divestiture-related impacts, indicating constructive momentum and a cautiously positive outlook.Q3-2026 Updates
Positive Updates
Consolidated Revenue Growth
Net revenue of $94.2M in fiscal Q3 (period ended Dec 31, 2025), up 7% year-over-year, driven by record global medical cannabis performance.
Strong Medical Cannabis Performance
Global medical cannabis revenue of $76.2M, up 12% YoY, with international medical cannabis up 17%; medical cannabis represented 81% of net revenue (versus 77% prior year) and ~95% of adjusted gross profit.
High and Improving Margins
Consolidated adjusted gross margin improved 100 basis points to 62%; medical cannabis adjusted gross margin held at 69%, supporting adjusted gross profit of $55.6M (up 6% YoY).
Profitability and Cash Generation
Adjusted EBITDA of $18.5M and adjusted net income of $7.2M in Q3; positive free cash flow of $15.5M; cash, cash equivalents and short-term investments totaled $154M and the company reported no cannabis business-related debt.
Global Commercial Execution and Regulatory Positioning
Market leadership across key international markets: #1 in Poland (2025), #2 share in Australia, continued share gains in Germany; ~90% of annual manufacturing capacity produced in European and TGA GMP-certified facilities; three Canadian facilities received renewed GMP certification for three years.
Strategic Actions to Improve Focus and Capital Flexibility
Announced selective exit from lower-margin Canadian consumer cannabis markets and divestiture of controlling stake in plant propagation (Bevo) to reallocate high-quality flower and resources to higher-margin global medical cannabis; filed $100M at-the-market (ATM) equity program to fund accretive initiatives including cultivation capacity and M&A.
Full-Year Outlook Indicates Growth
Annual global medical cannabis net revenue guidance of $269M–$281M (expected 10%–15% growth) and consolidated adjusted EBITDA guidance of $52M–$57M (expected 5%–10% growth), with management expecting margins to remain strong driven by sales mix and operational efficiencies.
Negative Updates
Sharp Decline in Canadian Consumer Cannabis
Consumer cannabis net revenue declined 48% YoY to $5.2M (from $9.9M), reflecting the company's strategic reallocation of product and resources away from lower-margin consumer markets.
Plant Propagation Margin Compression and Write-Offs
People's plant propagation revenue rose 27% to $11.3M, but adjusted gross margin fell dramatically to 16% from 40% prior year, driven by higher contract labour and utilities costs and $1.1M of inventory write-offs (surplus plants).
Higher Operating Costs (SG&A)
Consolidated adjusted SG&A increased 14.5% YoY to $35.8M due to higher professional fees, additional headcount and contract labour in Europe and Australia supporting international growth; this pressure reduced operating leverage.
Adjusted EBITDA and Free Cash Flow Softness vs Prior Year
Adjusted EBITDA decreased modestly to $18.5M from $19.4M a year ago; free cash flow fell to $15.5M from $27.4M, with a $9.2M decrease in working capital recovery contributing to the contraction.
Near-Term Market and Pricing Pressure in Select Markets
Increased competition and price pressure noted in Germany's value segment and an influx of value products in the UK led to lower YoY sales; Australia transition from value to premium mix is expected to create near-term pressure on sales and gross profit during the portfolio premiumization.
Uncertainty from Regulatory Changes
Potential telehealth/regulatory modifications in Germany and ongoing evolution of market frameworks (e.g., telehealth-to-clinic prescription shifts) create regulatory uncertainty that could affect access dynamics and require executional agility.
Company Guidance
Management guided fiscal 2026 toward a medical‑first outcome, forecasting annual global medical cannabis net revenue to grow 10–15% to $269–$281 million (medical was ~81% of net revenue and ~95% of adjusted gross profit in Q3), consolidated adjusted EBITDA of $52–$57 million (up ~5–10% year‑over‑year), and sustained strong consolidated adjusted gross margins (Q3 was 62% consolidated and 69% for medical). They expect plant‑propagation revenue to follow normal seasonality (65–75% of that revenue in the first half of the calendar year), noted some one‑time cash costs in Q4 tied to exiting select Canadian consumer markets but said adjusted EBITDA should improve thereafter, and filed an ATM to raise up to $100 million for accretive uses (e.g., cultivation capacity, M&A); the quarter closed with $154 million cash and no cannabis business debt.Aurora Cannabis Financial Statement Overview
Summary
Improving trajectory with very strong TTM revenue growth and high gross margin, plus a relatively manageable leverage profile. However, operating and net profitability are not yet consistently durable and TTM cash generation remains the key weakness (negative operating cash flow and materially negative free cash flow).Income Statement
TTM (Trailing-Twelve-Months) results show strong top-line momentum (revenue up ~164%) and improved gross profitability (gross profit margin ~63%). However, profitability remains mixed: the company is still reporting a net loss (about -$6.3M) and negative operating profit (EBIT about -$78.6M), despite positive EBITDA. Annual results show a sharp turnaround from heavy losses in 2024 and 2023 to modest profitability in 2025, but the earnings base is still not yet consistently durable.58
Neutral
Balance Sheet
Leverage looks manageable with debt to equity around ~0.18 in both TTM (Trailing-Twelve-Months) and FY2025, and total debt is relatively modest versus equity. The balance sheet has improved meaningfully from FY2023 when leverage was higher, supporting financial flexibility. The key weakness is that returns to shareholders remain low and volatile (strongly negative in prior years and only modestly positive recently), which suggests the equity base is not yet producing steady profitability.72
Positive
Cash Flow
Cash generation is the weak point: TTM (Trailing-Twelve-Months) operating cash flow is negative (~-$9.6M) and free cash flow is materially negative (~-$31.3M). While FY2025 operating cash flow turned positive, free cash flow remained slightly negative, and the business has a multi-year pattern of cash burn. This raises execution and funding risk if positive cash flow does not stabilize alongside the improving income statement.39
Negative
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 370.95M | 343.29M | 270.28M | 233.29M | 221.34M | 245.25M |
| Gross Profit | 104.06M | 187.61M | 131.46M | -64.36M | 21.23M | -21.56M |
| EBITDA | 23.50M | 51.35M | -12.34M | -210.74M | -1.55B | -535.28M |
| Net Income | -6.28M | 1.59M | -69.33M | -265.33M | -1.72B | -693.63M |
Balance Sheet | ||||||
| Total Assets | 775.29M | 852.67M | 838.67M | 926.32M | 1.08B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 154.44M | 138.47M | 117.47M | 300.84M | 439.14M | 425.21M |
| Total Debt | 134.19M | 104.58M | 104.79M | 227.52M | 269.49M | 399.55M |
| Total Liabilities | 207.47M | 244.07M | 236.80M | 409.19M | 422.00M | 567.03M |
| Stockholders Equity | 536.36M | 567.17M | 559.77M | 486.08M | 661.84M | 2.04B |
Cash Flow | ||||||
| Free Cash Flow | -31.27M | -2.85M | -85.46M | -127.95M | -142.48M | -263.66M |
| Operating Cash Flow | -9.60M | 16.00M | -68.51M | -115.82M | -110.27M | -210.58M |
| Investing Cash Flow | -76.41M | -14.33M | -5.49M | -27.29M | -36.17M | -26.91M |
| Financing Cash Flow | 5.01M | -116.00K | -47.92M | -56.48M | 147.78M | 521.95M |
Aurora Cannabis Technical Analysis
Negative
4.78
Price Trends
5.59
Negative
6.17
Negative
6.55
Negative
Market Momentum
-0.14
Negative
38.06
Neutral
43.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACB, the sentiment is Negative. The current price of 4.78 is below the 20-day moving average (MA) of 4.99, below the 50-day MA of 5.59, and below the 200-day MA of 6.55, indicating a bearish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 38.06 is Neutral, neither overbought nor oversold. The STOCH value of 43.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ACB.
Aurora Cannabis Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | C$2.07B | 16.23 | 6.18% | ― | 6.18% | -28.69% | |
60 Neutral | C$1.35B | -104.58 | -0.88% | ― | 22.20% | ― | |
56 Neutral | C$1.61B | -13.95 | -9.14% | ― | 4.27% | 3.41% | |
52 Neutral | C$282.98M | 44.94 | -16.05% | ― | 23.87% | -19.57% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | C$2.41B | -8.05 | -27.48% | ― | -3.38% | -31.35% | |
46 Neutral | C$532.42M | -2.15 | -47.80% | ― | -0.67% | 58.98% |
* Healthcare Sector Average
TSE:ACB
Aurora Cannabis
4.99
-2.19
-30.50%
TSE:WEED
Canopy Growth
1.48
-0.32
-17.78%
TSE:CRON
Cronos Group
3.60
0.69
23.71%
TSE:CURA
Curaleaf Holdings
3.21
1.61
100.62%
TSE:GTII
Green Thumb Industries
8.94
-1.35
-13.12%
TSE:TRUL
Trulieve Cannabis
8.79
2.30
35.44%
Aurora Cannabis Corporate Events
Business Operations and StrategyM&A Transactions
Aurora Cannabis to Spotlight Strategy at TD Cowen Conference, Closes Bevo Deal
Positive
Feb 18, 2026
Aurora Cannabis will showcase its growth strategy and view on global medical cannabis trends at TD Cowen’s 46th Annual Health Care Conference in Boston on March 2, 2026, where CFO Simona King will join a fireside chat and investor meetings. The presentation is positioned to highlight the company’s international leadership, Canadian manufacturing capabilities and the broader market forces shaping the sector, reinforcing Aurora’s profile among institutional investors.
The company also confirmed it has closed its previously announced transaction with Bevo Agtech, advancing a deal that may support operational diversification and potential synergies across cultivation and plant science. Completion of the Bevo transaction underscores Aurora’s ongoing efforts to refine its portfolio and strengthen its competitive positioning in the evolving global cannabis market.
The most recent analyst rating on (TSE:ACB) stock is a Hold with a C$4.50 price target. To see the full list of analyst forecasts on Aurora Cannabis stock, see the TSE:ACB Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.