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Until Aurora Cannabis starts generating positive cash flow consistently, investors are better off putting the stock in their watchlists rather than in their portfolios. While you might miss out on some gains by waiting, you can also minimize the risk of a huge sell-off by waiting to see that the company's financials have significantly improved before deciding to buy the stock. This has been an incredibly risky stock to own, and investors should be extra careful when it comes to Aurora Cannabis. That is the kind of volatility that seasoned cannabis investors have become accustomed to. Even if the stock continues soaring in September, the danger is that there could be a reversal next month.

It may be tempting for cannabis investors to buy into this red-hot rally, but the prudent thing for investors to do is to wait and see how Aurora performs in future quarters. Should you invest in Aurora Cannabis stock? Bevo is also a seasonal business, which Aurora says generates nearly three-quarters of its annual revenue during the first half of the year - Aurora's top line will likely look less impressive in upcoming quarters, and that could have a big impact on earnings. Investors need to brace for the reality that Aurora likely won't continue growing at such fast rates. Bevo Farms is in the plant propagation business, and its revenue wasn't included in Aurora's prior-year results.Īurora's focus, however, remains predominantly on the medical marijuana market, where growth prospects aren't nearly as promising as in the recreational market. The company did achieve impressive 50% year-over-year revenue growth in its latest earnings report (for the period ending June 30) with sales topping 75.1 million Canadian dollars, but that was largely due to new revenue from Bevo Farms, which Aurora now has a controlling interest in (it acquired it in August 2022). And there are still question marks about its growth. Aurora Cannabis isn't out of the woods just yetĪurora has a lot of upside, but for its stock to net big returns for investors, the company has to deliver on its promises and prove that it has turned its business around. With a more positive outlook, investors are starting to feel more bullish about the stock again, which can lead to an even greater rally as the month goes on.

Aurora farms stores free#

If Aurora can achieve positive free cash flow, that also means less risk of dilution in the future. Cash flow has been improving, which means the company's operations are becoming more sustainable. The company has achieved positive adjusted earnings before interest, taxes, depreciation and amortization ( EBITDA) for three straight quarters. And with pot stocks gaining more attention due to talk of marijuana reform, Aurora is in prime position to benefit from these developments. Here's a look at just how badly Aurora Cannabis stock has performed in recent years: YearĪurora has burned investors badly over the years, but its beaten-down valuation also means there's potentially a lot more upside for the stock now that it appears to be getting its house in order. Not only is the company improving its financials, but the stock has taken a beating over the years, which could make the stock overdue for a rally. Over the years, Aurora has struggled with cash flow, but it has been making some steady progress this year.ĪCB Cash from Operations (Quarterly) data by YChartsĭespite its strong gains in September, Aurora could be on its way to an even higher valuation. Free cash flow is after accounting for capital expenditures and is a sign of even stronger financials. Simply generating positive operating cash flow is something marijuana companies strive for. Positive free cash flow would be a huge accomplishment for Aurora. CEO Miguel Martin says the company has 'one of the strongest balance sheets of the Canadian LPs' and projects that before the end of next year, the company will be generating positive free cash flow. The company says that since December 2021, it has repurchased $306 million in convertible senior notes and estimates that has reduced its interest costs by nearly $24 million. This month, it announced that it had recently repurchased $9 million in convertible senior notes, which will reduce its interest expenses. The company has been slashing its expenses as it aims for positive cash flowĪurora has been making an effort to reduce its costs in the hopes of reaching profitability and improving its cash flow.