Like many other companies in the cannabis industry, Aurora Cannabis Inc (NYSE:ACB) is facing some challenges. These challenges have caused the price of Aurora Cannabis stock to fall over the past few months. In March, it traded over $10 per share, while ACB stock price is currently below $6.
Aurora just announced its Q4 earnings. Here is a look at the nine Key Performance Indicators that the company likes to focus on. The comparisons below reflect changes from the company’s third quarter to its fourth quarter, which ended on June 30. All of the monetary figures are in Canadian dollars.
Consumer Revenue grew about 53% from $29.6 million to $44.9 million.
Medical Revenue grew almost 10% to $29.6 million from $27 million.
International Revenue increased 12% from $4 million to $4.5 million.
Cash Cost to Produce a Gram dropped an impressive 20% from $1.43 to $1.14.
Average Net Selling Price per Gram fell 17% to $5.32 from $6.40.
Gross Margin on Cannabis Net Revenue increased three percentage points to 58%.
Kilograms Produced grew by 86% to 29,034.
Selling, General, and Administrative costs rose 9% to $72.9 million.
Active Registered Patients increased by 10% from 77,136 to 84,729.
At first glance, these numbers appear to be pretty impressive. Other than SG&A costs growing by a small amount and the drop in the average selling price per gram, the numbers increased considerably.
However, something that wasn’t in the press release announcing the earnings may give more insight into how the company is performing. And that would be its actual earnings.
That’s right. The company’s profits (or, in the case of its 2019 results, its losses) were not mentioned in the earnings release. That has to be a sign that its earnings were not good because if they were, you can bet they would have been highlighted. I found them on the company’s consolidated financial statements.
Its net income for 2019 was a loss of $297,924,000 Canadian dollars. That was a dramatic drop verses the previous year’s income of $69,227,000 CAD. In 2019, ACB reported a loss per share of 29 cents CAD, versus its 2018 EPS of 16 cents CAD. In Q4, its EPS came in at 13 cents, unchanged versus the same period a year earlier.
I suppose that I can’t blame ACB for not wanting people to focus on the fact that the company is losing a lot of money. Obviously, however, you should be aware of this if you own Aurora Cannabis stock or are considering buying shares. At some point, ACB will need to make some significant changes because if it keeps losing money, then ACB stock price will probably keep going down.
What’s next for Aurora Cannabis Stock?
ACB stock has been consolidating over the past few days, since it broke out of its recent downtrend. If Aurora Cannabis stock trends lower, it will probably find some short-term support around the $5.50 level because that is where its most recent low was two weeks ago. If ACB stock rallies, there will most likely be resistance again around the $7 level because that was where it hit resistance in early August. If Aurora Cannabis stock falls, look for support around $5 because that is where its lows were in January and December.
At the time of this writing, Mark Putrino did not hold any positions in any of the aforementioned securities.