Aurora stock has been facing a lot of selling pressure since mid-March due to disappointing earnings and the broader sell-off in the cannabis sector. Let's analyze the recent developments from Aurora Cannabis (TSX:ACB) (NYSE:ACB).
Analysts are Bullish
Since around March, the cannabis sector has been going through a bit of a slowdown, and many of the stocks in the sector have seen their value plummet since then. However, even in a sluggish market, there are some stocks that are undervalued and could prove to be smart picks for investors.
Aurora Cannabis, which is one of the bigger companies in the Canadian cannabis industry, is one such stock. Analysts believe that the cannabis industry is going to eventually grow into a $200 billion industry and among the big-ticket companies, Aurora could well prove to be the best pick.
In the last reported quarter, it emerged that Aurora Cannabis had become the third-biggest firm in the Canadian market by way of volume as well as sales. However, more importantly, the company’s margins have also improved significantly, and at the same time, Aurora managed to reduce its costs.
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Despite the successful quarter, Aurora stock is down over 4.50% at $5.84 CAD at the time of writing and made a new 52-week low of $5.79 earlier in the session. But does that mean it's time to panic?
All things considered, maybe not. In addition to its successful quarter, Aurora’s distribution networks and production capabilities have also improved significantly in recent months. These factors give the company an important edge when it comes to long-term growth, and hence, analysts’ views about Aurora have also improved dramatically in recent times.
Long-Term Growth
Aurora Cannabis has also forged important partnerships that will help with the company’s long-term growth. At this point in time, Aurora stock is trading at levels 55% below its 2019 high and hence, it could be argued that it is currently one of the cheapest stocks to invest in, for the cannabis sector.
Some experts believe that it could be a good idea to buy the dips as the cannabis sector continues to consolidate for the next spurt of growth. While it is true that the company’s long-term outlook might be bright, it is unlikely that the stock is going to bounce back any time soon. If an investor has a longer investment window, then Aurora stock could prove to be a clever investment. But as always, do your own research before making any moves.
Featured image: Canva
