Aurora Cannabis Is Set for Secular Growth. Here’s What the Future Holds for ACB Stock.

ACB stock - Aurora Cannabis Is Set for Secular Growth. Here’s What the Future Holds for ACB Stock.

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Aurora Cannabis (NASDAQ:ACB) stock is one of the most overlooked assets on the market; it’s as simple as that. Many investors are discouraged by Cannabis sector stocks after their abrupt drawdown during the past year. However, let me remind you of the market’s golden rule: “buy low, sell high.” If you haven’t already done so, consider buying the dip on ACB stock.

Aurora really is a “best-in-class” pick. First of all, the company exhibits the largest gross profit margins (53%) in the cannabis industry, suggesting that economics of scale is part of its furniture. Aurora’s achieved this feat by delivering a wide breadth of products spanning the medical and recreational markets. Furthermore, the company’s vertically integrated business model provides it with significant pricing and bargaining power. Its model flows from four mega-production facilities all the way to an online medical platform, enabling it to benefit from various synergies.

Another aspect to consider is Aurora’s growth in the international markets. The company’s an upstream market leader in countries like Israel, Germany, France, Poland and the United Kingdom. The firm’s global footprint lets it smooth out revenue by dodging single-jurisdiction regulatory surprises and coherent economic shocks.

Furthermore, BDSA forecasts Cannabis sales to expand by 22% for the full-year amid robust support from emerging markets. Aurora’s market stronghold suggests that its economic benefits from a rise in sales will likely exceed its peers, thus, proliferating its intrinsic value. As a matter of fact, the stock’s undervalued on a normalized basis. ACB stock is trading at a normalized price-sales discount of 37.35% and a price-book discount worth 24.86%, implying that market participants haven’t taken note of ACB’s latest financial performance.

I’m aware that the current market environment isn’t receptive to growth stocks, but Aurora has that ex-factor. Moreover, the stock’s underappreciated, with a relative strength index (RSI) reading of 44.52. Thus, I’m going for it on this one!

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On the date of publication, Steve Booyens did not hold any position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Steve co-founded Pearl Gray Equity and Research in 2020 and has been responsible for institutional equity research and PR ever since. Before founding the firm, Steve spent time working in various finance roles in London and South Africa. He holds an MSc in Investment Banking from Queen Mary – University of London and is working towards his Ph.D. in Finance, in which he’s attempting to challenge the renowned Fama-French 5-factor pricing model by incorporating ESG factors. His articles are published on various reputable web pages such as Seeking Alpha, TipRanks, Yahoo Finance, and Benzinga. Steve’s articles on InvestorPlace form an interesting juxtaposition between mainstream opinion and objective theory. Readers can expect coverage on frequently traded stocks, cryptocurrencies, crowdfunding, and ETFs.


Article printed from InvestorPlace Media, https://investorplace.com/2022/05/aurora-cannabis-is-set-for-secular-growth-heres-what-the-future-holds-for-acb-stock/.

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