One-glance verdict
Overvalued
$1.07 our estimate vs market $4.10
284% above our estimate, beyond the bull case
Fundamentals snapshot
Aurora Cannabis Inc.
ACB · NCM · Healthcare · Drug Manufacturers - Specialty & Generic
Current price
$4.10
52-week range
$2.56 - $6.67
Market cap
$259.57M
Balance sheet
Healthy
-25.79x Concerning
Net cash $54.70M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 11.0% last year.
- Reward Free cash flow was positive in 1/10 years.
- Risk Return on equity was -9.4% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 1.2% (peer median: 1.7%).
What this company does
Aurora Cannabis Inc.
Aurora Cannabis sells a wide variety of cannabis products in Canada and other countries, including both medical cannabis for patients and recreational items like edibles and vapes. The company's revenue (the total money earned from sales) comes mainly from its medical cannabis business, which is important because that market can offer more stable and predictable customer demand than the more crowded consumer market.
How the company got here
Founded in 2006 in Alberta, Canada, Aurora Cannabis started by securing land and obtaining one of the first federal licenses to grow medical cannabis in the province. The company grew rapidly, especially after Canada legalized recreational cannabis, by acquiring several other cannabis companies to expand its operations both in Canada and internationally, particularly in Europe. However, the initial boom was followed by a period of financial difficulty due to an oversupply in the Canadian market, leading to significant cost-cutting and a change in leadership. This led to a major strategic shift, moving the company's focus away from the competitive Canadian recreational market to what it sees as the more stable and profitable global medical cannabis sector.
What it actually does
Aurora Cannabis produces and sells a variety of cannabis products for both medical patients and, to a lesser extent, recreational consumers. For individuals, this means they offer products you might see in a dispensary, like dried cannabis flower, pre-rolled joints, cannabis oils, edible products like gummies, and vapes. They also provide services to medical patients, such as counseling and online ordering. The company operates under several different brand names, including Aurora, MedReleaf, and Daily Special, to cater to different consumer preferences and price points.
Global Medical Cannabis
This is Aurora's primary business, making up the vast majority of its sales. In this segment, the company produces and sells pharmaceutical-grade cannabis products to patients in countries where it is legal, such as Canada, Germany, Poland, and Australia. These products are often prescribed by doctors and distributed through pharmacies or specialized medical channels. The company has focused heavily on this area because medical markets are often more regulated and have higher margins (the profit made on each sale) than the recreational market.
Canadian Consumer Cannabis
This part of the business sells cannabis products for recreational use in Canada. While this was a major focus after Canada's legalization, the company has deliberately reduced its involvement in this highly competitive market. This segment offers products like dried flower, vapes, and edibles through provincially regulated retailers. It represents a much smaller and less profitable piece of Aurora's overall business compared to its medical sales.
What management is betting on now
The company's current strategy is heavily focused on expanding its presence in international medical cannabis markets, particularly in Europe and Australia. Management believes these regulated markets offer better long-term growth and profitability than the crowded Canadian recreational scene. They are investing in obtaining the necessary certifications for their production facilities to meet the strict standards of different countries. The goal is to become a leading and trusted supplier of high-quality medical cannabis to patients around the world, leveraging their experience in regulated environments.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $1.07 vs current price $4.10
Our most-likely fair value is $1.07 a share — about 73.9% below today's price of $4.10, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $54.7M - more cash than debt. Interest coverage -25.8x.
Net debt
$-54.70M
Interest coverage
-25.79x
Aurora Cannabis Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 5 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ACB
BASELINE
Aurora Cannabis Inc.
Total debt $16.04M Interest coverage -25.79x This is the baseline the peer rows are being compared against.
Total debt $196.12M Interest coverage -1.91x Neither company has much profit cushion over interest right now.
Total debt $398.40M Interest coverage -1.85x Neither company has much profit cushion over interest right now.
Total debt $117.66M Interest coverage -0.59x Neither company has much profit cushion over interest right now.
Total debt $1.29M Interest coverage -1,499.77x Neither company has much profit cushion over interest right now.
Total debt $22.38M Interest coverage -35.66x Neither company has much profit cushion over interest right now.
What you should know
The case for and against ACB
2 Rewards
2 Risks
Rewards
-
Revenue grew 11.0% last year.
-
Free cash flow was positive in 1/10 years.
Risks
-
Return on equity was -9.4% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 1.2% (peer median: 1.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
-37.27x
P/B
0.70x
P/S
0.83x
EV/EBITDA
-6.30x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
44.2%
Operating margin
-12.9%
Net margin
-38.2%
ROE
-9.4%
ROA
-3.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.04x
Current ratio
5.36x
Quick ratio
1.92x
Total debt
$16.04M
Total cash
$70.74M
Growth
How the business has been compounding
Revenue TTM
$222.10M
Revenue 5Y CAGR
13.1%
EPS TTM
-0.65
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-9.55M
Free CF TTM
$-25.50M
FCF margin
-11.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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