Yahoo Finance Aurora Cannabis Inc’s (TSE:ACB) Path To Profitability
Aurora Cannabis Inc’s (TSX:ACB): Aurora Cannabis Inc., together with its subsidiaries, produces and distributes medical marijuana products in Canada. With the latest financial year loss of -CA$12.97M and a trailing-twelve month of -CA$12.75M, the CA$5.25B market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is ACB’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for ACB’s growth and when analysts expect the company to become profitable.
View our latest analysis for Aurora Cannabis
Expectation from analysts is ACB is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of CA$47.53M in 2019. ACB is therefore projected to breakeven around a few months from now. How fast will ACB have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 143.40% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, ACB may become profitable much later than analysts predict.
Underlying developments driving ACB’s growth isn’t the focus of this broad overview, but, take into account that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that ACB has managed its capital judiciously, with debt making up 15.09% of equity. This means that ACB has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of ACB to cover in one brief article, but the key fundamentals for the company can all be found in one place – ACB’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further examine:
Valuation: What is ACB worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ACB is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aurora Cannabis’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
