Aurora Cannabis Could Be One of the First Marijuana Sellers to Turn a Profit

Aurora Cannabis is on track to be the one of the first big marijuana firms to turn a profit. That could come as soon as this quarter, according to Cowenanalyst Vivien Azer. 

The back story. Aurora Cannabis sold 9 metric tons of marijuana last quarter, but that wasn’t enough to beat Wall Street’s bar for revenue and adjusted earnings. At the time, BMO Capital Markets analyst Tamy Chen was concerned about a lack of supply that could hinder its path to profitability.

Aurora stock (ticker: ACB) closed at $9.25 3 months ago. Since then it has shed a fifth of its value, sinking to $7.30 at Friday’s close. Some have been bullish, Bank of America Merrill Lynch and Cowen among them, while others, including Stifel’s Andrew Carter, prefer rival Canopy Growth.

What's new. Azer called Aurora stock her top marijuana pick, in a note to clients on Monday. She wrote that while other firms struggle with larger losses, Aurora could reach positive earnings before interest, taxes, depreciation, and amortization, or Ebitda, this quarter. Compare that with Canopy, which posted an expanded Ebitda loss of 98 million Canadian dollars (US$74.3 million) when in reported fiscal fourth quarter earnings last week.
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