is on the right track to be one of the first big marijuana companies to win. It may come as soon as the quarter, according to Cowen analyst Vivien Azer .
Bakhistorien. Aurora Cannabis sold 9 tons of marijuana last year, but it was not enough to beat Wall Street's bar for income and adjusted earnings. At that time, BMO Capital Markets analyst Tamy Chen was worried about the lack of supply that could hinder his way to profitability.
Aurora share (ticker: ACB) closed at $ 9.25 3 months ago. Since then, it has cast a fifth of its value, dropping to $ 7.30 on 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.
new. Azer named Aurora makes her top marijuana pick, in a note to clients on Monday. She wrote that while other companies are struggling with major losses, Aurora was now able to earn positive earnings before interest, taxes, depreciation and depreciation, or Ebitda in the quarter. Compare it to Canopy, which provided an extended Ebitda loss of $ 98 million (US $ 74.3 million) when reported in last year's fourth quarter last year.
"At a time when EBITDA losses across the industry are elevated, we have a strong appreciation for ACB's operational rigor," Azer wrote.
She noted that Aurora has a No. 2 position in recreational use and is among the best in keeping a variety of products in stock in Ontario, British Columbia and Alberta. . She also said it has the largest cultivation footprint in Canada, giving the company the infrastructure to boost sales on the medical market during a weaker recreational market.
The Aurora stock closed 2.9% on Monday at $ 7.51 per share, while
was pretty flat.
Looking ahead. Azer maintained an Outperform rating, noting that it should act at a premium to its peers "given its long-term path to profitability in the context of strong early execution in the growing Canadian cannabis adult market."
She said what the recreational market is evolving, she looks for better industrial supplies to support brick and mortar stores and pull more market share from illegal sellers.
Health Canada will also start evaluating second-wave cannabis products, such as vapes and edibles, in October. The process will take 60 days, which means that these products would not hit the shelves at least mid to late December. When that happens, Azer Aurora expects to focus its efforts on steam, although "they will probably have a diverse product portfolio."
She said that Aurora could add revenue through its business in Germany and Australia, and attract a large-scale strategic partner "probably broker of strategic adviser Nelson Peltz."
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