Aurora stock is expected to be volatile this week as Aurora Cannabis (TSX:ACB) (NYSE:ACB) is set to report third-quarter earnings tomorrow after the closing bell.
Aurora Cannabis has been one of the bedrocks of the formal cannabis industry for some time now but over the past few days, the stock has been trading within a certain range as investors wait for the third quarter results. The company, which primarily operates in Canada, could well be a bellwether on how the recreational cannabis market in the country is shaping up.
In addition to that, the disappointment from Cronos Group Inc. (TSX:CRON) (NASDAQ:CRON)'s earnings report has made investors far more cautious about making moves. It seems that investors are waiting until the earnings report from Aurora is released before they decide on their course of action.
Aurora Stock: Quick Review
Ever since cannabis stocks started listing on US stock exchanges, there has been notable enthusiasm about many of those stocks from investors and Aurora stock is no exception. In fact, the stock has been on a tear in 2019 and has gained as much as 44% this year. Additionally, it has gained an astounding 68% over the course of the last year. However, the optimism for ACB stock and the sector at large is now weaker as compared to sentiments a few months ago.
In the prior quarter, Aurora delivered a bravura performance as it beat its own revenue projection of $37.6 million, by delivering revenues of $40.7 million. However, the company’s losses were pegged at $178.6 million. In addition to that, the hunger for more mergers and acquisitions also weighed on the bottom line.
Earnings Expectations
Despite the fact that Aurora stock is up this year by a significant margin, it needs to be remembered that the stock has not yet gone on to hit the heady heights of October 2018, when Aurora Cannabis (TSX:ACB) (NYSE:ACB) and other marijuana stocks reached new highs. For instance, in March alone, Aurora stock slid by as much as 16% and there is a genuine concern about a supply glut, which could also eat into the company’s margins in the near future.
Despite all the concerns, the company’s revenue growth is expected to grow unabated and according to Zacks Equity Research, the revenue for the quarter is going to be $55.1 million. However, the company is projected to report a loss of 3 cents a share.
Aurora stock is down 2.57%, selling at $8.15 USD, in Monday's trading session.
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