- NYSE:ACB tumbled by nearly 30% as next year’s outlook brings a troubling forecast.
- CIBC analyst downgrades price target and the overall outlook for Aurora.
- Aurora CEO admits that the company is no longer the top dog in the Canadian cannabis industry.
It has been another disappointing quarter for NYSE:ACB investors as the once prominent marijuana company continues to tumble closer to obscurity. On Wednesday shares fell almost 30%, hitting a new 52-week low and closing the trading session at $5.17. The stock has now fallen nearly 90% over the past year and is lagging the performance of the S&P 500 by 100%.
The Q4 earnings call was another bleak look into the future of the cannabis industry as CEO Miguel Martin openly acknowledged that Aurora has “slipped from its top position in Canadian consumer” and will likely shift its focus to higher-end, premium products. The change in product selection comes as both the Canadian and American cannabis markets have been overrun by discount brands, from which Aurora is now trying to distance themselves. By offering a more premium selection of products such as edibles and concentrates, the firm hopes to re-establish itself as a go-to brand in the recreational cannabis sector.
ACB stock forecast
The bottom line is that the company lost nearly $3.3 billion in its fiscal year 2020 and gave an even worse outlook for 2021. The Edmonton based firm forecasts Q1 revenue between $60 million and $64 million, which would mean anywhere from a 5% to 11% decline in cannabis revenue for Aurora. CIBC analyst John Zamparo slashed his price target from $20 down to $12, meaning that there may be some upside to the stock at its current levels. Even for bargain investors, Aurora is probably not worth the risk with projected declining revenues and no signs of Federal legalization in the United States, it may be beyond the point of saving itself.
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