Higher Returns with Aurora Cannabis
Investors want what they're on!
Aurora Cannabis Inc. (Nasdaq: ACB), a federally-licensed producer of medical and consumer cannabis, is attractively positioned as an early leader in global regulated markets. ACB leverages a best-in-class brand portfolio to grow and sell products across all major cannabis categories. And it's translating to results: the company just delivered a top-down beat on strengthening industry tailwinds and expanding global sales.
With a strong footprint in key medical cannabis markets in North America, Europe, and Australia, the company excels at meeting both patient and regulatory demands. This early adaptation of medical markets is already paying off with strong revenue growth and creates a first-mover advantage once these regions transform into recreational markets. Germany is close to creating a national legalized consumer market, and as other European nations follow suit, top-line growth could skyrocket.
ACB is strategically positioned to rapidly expand into new markets within Europe as regulatory liberalization continues. Notably, a local presence in these markets mostly shields ACB from tariff-related uncertainty.
Here's ACB's global presence in one glance: #1 in Canadian medical market share, #2 in Australia following the acquisition of MedReleaf Australia in 2024, #3 in Poland, and one of only three companies licensed to cultivate in Germany.
Since June 2021, ACB has introduced 24 new proprietary strains, which drive yield, potency, and cost-efficiency. Newly engineered next-gen cultivars appeal to consumers with increased consistency and save up to 30% in per-unit costs. Both are key differentiators in the consumer and medical market.
ACB's one-of-a-kind combination of regulatory expertise, brand architecture, and scientific innovation enables superior financial performance, as demonstrated in the top-down beat delivered in the latest quarter, driven mainly by a 51% increase in international medical cannabis revenue. The debt-free cannabis business has taken decisive steps to ensure profitable growth moving forward. By rightsizing its SG&A expenses and consolidating its manufacturing footprint, ACB delivered positive net-income for the second time in company history, as well as record adjusted EBITDA and FCF.
Our bullish outlook for 2025 is fueled by improved company profitability and favorable external forces. ACB currently trades at a NTM price/sales multiple of 0.96x – a big discount to its own 3-year mean multiple of 1.51x, indicating that the stock price has not caught up to recent developments and is due for a rerating. What's more, ACB trades at a significant discount to almost all peers on an Ebitda basis.
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