Aurora stock has been facing continuous selling pressures on broader sell-off in the cannabis sector and recently made a new low. Let's analyze the recent key developments from Aurora Cannabis (TSX:ACB) (NYSE:ACB).
Over the past months, many cannabis stocks have been in freefall due to the structural issues with the sector at this point in time. However, this is possibly also an opportunity for certain cannabis stocks. Is Aurora stock one of those stocks? Aurora Cannabis is one of the biggest cannabis companies in the world and an established name, which are important factors when it comes to an industry that is still in its early stages.
Growth Through Acquisition
The medical cannabis market is one of the most promising niches in the cannabis industry, and when it comes to that market, Aurora Cannabis is among the two biggest operators. The company has made big-ticket acquisitions of CanniMed ($1.23 billion CAD) and MedReleaf ($3.2 billion CAD) to get to this position.
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These two deals propelled Aurora to the top of the market. On the other hand, there are industry-wide issues that have plagued the company. Legalization has not gone as well as many might have thought, and the black market continues to be the preferred choice of many customers in Canada for a variety of reasons.
Aurora stock is down 1.35% at $4.74 on the TSX.
It goes without saying that the initial surge in cannabis stocks, including that of Aurora, was due to high hopes, and it is quite possible that the market has become far more rational over the past months. Aurora's stock price slumped from its peak of $13.00 CAD in March to below $5.00 CAD recently. The current share price might seem attractive, but at the end of the day, Aurora is a loss-making company, and in the year that ended in June, it made a $298 million USD loss.
That being said, Aurora Cannabis remains among the biggest companies in the industry and should eventually become one of the dominant players in a high growth industry. Investors with a long-term outlook could consider Aurora stock.
What do you think?
Featured image: Canva
