The ACB stock is finally seeing green again. At the time of writing, Aurora Cannabis (TSX:ACB) (NYSE:ACB) is up 3.12% and selling for $7.94 per share.
ACB Stock: Is there More Potential Ahead?
In the stock market, green is always good. And at 3.12%, the gain isn't so huge that it can't possibly go any further. Of course, this is all plausible, and nobody knows what will actually happen, but at one point, not so long ago, ACB stock was worth almost double that.
So should we expect it to climb back up there?
The Good Times
At its highest high two weeks ago, ACB stock was valued at $15.07 per share. The question now is, is the cannabis market about to kick off again and can we expect the ACB stock to soar with it if it does?
Some believe the current downturn is simply the market correcting itself after all the hype surrounding legalization of adult-use in Canada. Others predict we are in an adolescent market that is only about to truly mature.
Both valid arguments.
What is the Real Worth of ACB Stock?
But then maybe we need to really get serious about these cannabis companies now that we can actually quantify real adult-use sales in Canada.
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Yes, Aurora Cannabis is very well-positioned to increase production capacity over a period of time. Its revenue and earnings growth will continue to increase as Canadian and global demand grows. However, at its current standing, Aurora is yet to be a profitable company.
Aurora has a debt of $51 million CAD, which is likely to increase, as the company looks for more finance to increase operations around the world.
So it may take a long time and a lot more adoption before Aurora begins to turn a serious profit. The ACB stock price may be based on market hype and not on actual business metrics. But also, maybe not.
In five years, we could be looking at a company that has gone from strength to strength, settled debts, and is returning serious profits to investors.
Or the cannabis market may chew Aurora up and spit it out as has happened with so many companies in different industrial bubbles of the past.
What do you think?
Featured Image: Depositphotos/© Wavebreakmedia
