Aurora stock in the past three months has lost around 20% of its value. With Aurora Cannabis (TSX:ACB) (NYSE:ACB) expected to release its fiscal Q4 results this week, investors will be anticipating a strong finish to send the stock up.
Here is what you need to know ahead of the earnings release.
Growth in Sales
Last month, Aurora Cannabis provided an update on its operations in which it stated that Q4 sales could be between $100 million CAD and $107 million CAD. These are impressive sales thanks to the recreational market, and they could be higher than the $90.5 million CAD reported by Canopy Growth (TSX:WEED) (NYSE:CGC) in its latest quarter.
When the company released this update, Aurora stock surged as high as $7.20 on the NYSE. Now that most investors know approximately what the sales numbers will be, it's unlikely the earnings report, in that regard, will have a huge effect on the stock when released—unless the numbers are drastically different from what Aurora Cannabis is predicting.
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If the sales land in the lower range, the result might affect the stock negatively, but if sales finish on the top end, Aurora stock may benefit from the exceptional growth.
Investors Focusing on the Bottom Line
Investors will be keen on the company’s net income in the quarter and whether it can match Aphria Inc's (TSX:APHA) (NYSE:APHA) remarkable results. This, however, will be unlikely considering the company is coming off a loss of around $158 million CAD in the third quarter. In the past three quarters, the company posted an operating loss of $74 million CAD. The company missed estimates, and it is unlikely it will turn a profit this quarter.
Besides the expected year-end report, there is a possibility that Aurora Cannabis won't receive a bump in share price even if sales fall within the range. Considering the industry headwinds, it will be wise to wait until the company releases its final results before making any decisions regarding Aurora stock.
Featured image: Canva
