The company released its fiscal fourth-quarter guidance this week … and things look smokin’ hot.
Cannabis companies are a hot topic on Wall Street. Increasingly, states in the U.S. are passing legislation legalizing cannabis and it is likely that at some point, federal legislation will be passed.
The Canadian company Aurora Cannabis continues to be one of the most highly regarded companies in the Canadian cannabis industry. It leads the market in production capacity and has the largest global presence in the cannabis sector.
And on Tuesday, the company’s stock rose more than 8% after issuing its guidance for the fiscal fourth quarter. Here are some details on the updated guidance as well as what to expect from the cannabis industry going forward.
Details on the Company’s Fourth-Quarter Guidance
During the fourth quarter, Aurora expects revenue to fall somewhere in a range of C$100 million and C$107 million. This is lower than the current FactSet guidance of C$112 million. But analysts didn’t seem to be too bothered by this, possibly because only a year earlier, Aurora’s revenue was at C$19.1 million.
When it comes to cannabis companies like Aurora, one of the key things analysts look for is the company’s production capacity. So they were encouraged by the company’s strong production guidance for the remainder of 2019.
Aurora expects to produce between 25,000 and 30,000 kg, as opposed to its previous estimates of 25,000 kg. According to a Cowan analyst, this demonstrates the company’s “strong production outlook.”
A press release from the company, CEO Terry Booth said, “Our success to date comes from a focus on quality, regulatory compliance, appropriate Board of Directors oversight, and delivering a profitable, low risk and sustainable business for our shareholders.”
What’s Next for the Cannabis Industry?
The cannabis industry has struggled in recent months, thanks to executive shake-ups at both Canopy Growth and CannTrust. Plus, the legal use of cannabis in Canada hasn’t been as straightforward as many anticipated it would be.
But the cannabis industry continues to grow at a double-digital annual rate and it’s expected to continue to do so for years to come. And Aurora’s current low stock price provides an attractive opportunity to invest in this long-term growth stock.
