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Aurora Cannabis stock recovered from early morning losses and then some Wednesday afternoon, climbing 3.3% to $8.68 at the close.

Where we were. Aurora Cannabis (ticker: ACB) said in its fiscal third-quarter earnings report released after the markets closed on Tuesday that it sold 9 metric tons of marijuana last quarter.

Despite concerns about slowdowns in Canada’s recreational pot market, Aurora Cannabis said net revenue grew 20% quarter over quarter, hitting 65 million Canadian dollars (US$48.5 million). Recreation sales also grew 37% from the previous quarter.

Aurora Cannabis stock was down 2.7% in Wednesday morning trading, to $8.15 per share.

What’s new. Cowen analyst Vivien Azer wrote in a note to clients on Wednesday that Aurora’s revenue “exceeded our forecast, driven by strong demand for adult use products,” but the Ebitda loss was larger than Azer had estimated.

She said dried-flower sales were the primary driver, growing 46% quarter over quarter, which was partially offset by a shortfall in extract sales, “which were challenged by capacity constraints.”

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Azer said she thinks Aurora is on track for positive earnings next quarter, although cost containment will be critical.

“With continued scale development at Aurora Sky, we would expect to see continued modest improvement as we expect ACB can achieve closer to a 60% gross margin in the next year, ultimately climbing to a mid-60% rate,” she wrote.

Desjardins analyst John Chu wrote in a note to clients that sales and Ebitda were below consensus estimates. He noted that higher general and administrative-related costs, though modestly offset by lower-than-expected sales and marketing expenses, were the main driver for Aurora missing his estimate.

Looking ahead. Both Chu and Azer have bullish ratings for the stock.

In an earnings call Wednesday morning, management said it expects to harvest and dry 25 metric tons of marijuana in the fourth quarter. Executives also discussed the prospects of marijuana vape pens, and organic edibles, which they said will be legalized in Canada as soon as mid-October.

Barron’s doesn’t see any bargains among pot stocks.