After becoming legalized in Canada in 2018, marijuana companies are in direct competition to provide the most value. This had lead companies into finding ways to increase production, reducing expenses, and provide a unique product that makes them unique. A
Aurora Cannabis Inc is one company that stands out amongst its competitors. Through its diverse product line, fast growth rate, and its legal licenses in Canada, we can see that this company has the skills needed to help them survive and thrive within the growing market.
This is our analysis of the Aurora Cannabis stock. Even though it was founded in 2006, the company has shown great signs of growth. Hopefully, through future innovative measures and sound investment choices, we can see its success go further.
About Aurora Cannabis Inc
Aurora Cannabis Inc is a Canadian licensed dispensary headquartered in Edmonton. Its shares are traded on the Toronto Stock Exchange and NYSE as ACB.
As of September 2018, Aurora Cannabis stock has obtained five sales licenses, eight licensed production facilities, and operates in over 18 countries. Through this, we can see that the company is impacting the cannabis industry while showing its potential to dominate the competition within the upcoming years.
Based on the Q1 2019 results, Aurora Cannabis stock has started to grow immensely. The company recorded a $102 million net income and a revenue growth rate of 262%.
These results compare favorably to how other companies have performed during this quarter:
|Company||Revenue Most Recent Quarter||Revenue Growth (YOY)|
|Aurora Cannabis||$30 million||262%|
|Cronos (CRON)||$4 million||187%|
|Aphria (APHA)||$13 million||118%|
|Tilray (TLRY)||$10 million||85%|
|Canopy Growth (CGC)||$23 million||33%|
Based on the chart above, we can see that Aurora Cannibis Inc has obtained the highest revenue within its most recent quarter. At the same time, the company has gained the fastest growth rate by a large margin.
We would expect that the fastest growing and biggest growing company is the most valuable. Yet once we observe the valuation of these companies, it tells a different story.
Based on this graph, we can see that Aurora Cannabis is facing stiff competition against Canopy Growth (Market Value: $10.73 Billion) and Tilray Inc (Market Value: $9.68 Billion). While Aurora Cannabis has a higher growth rate (262%), it has a value of $5.8 billion.
Despite its slight dip in value, Aurora Inc still has the potential to make great strides in Q1 2019. Since its competitors both have a growth rate that’s under 100%, they might not be able to meet with Aurora Inc’s 262% increase. If this trend continues, Aurora Cannabis will grow to the point that its value surpasses both companies.
Aurora Plans for Dominating the Marijuana Industry
Aurora Cannabis stock has planned to surpass their competitors by investing in marijuana fields that can produce marijuana products at a cheaper scale. Currently, their annual marijuana production is about 70,000 kilograms annually. They hope to increase this number by 150,000 kilograms per year by early 2019.
The increase in capacity is due to its product Aurora Sky increasing in value. Since its a next-generation greenhouse, AuroraS Sky utilizes technologies that lower labor costs and utility costs. Eventually, Aurora Cannabis Inc believes that it will create marijuana at less than $1 a kilogram at Aurora Sky.
We will get some insight on how Aurora will reach its target within the next year. Management has stated that 17 rooms within Aurora Sky will receive its plants in the upcoming months, and its facility will become fully planted by the end of 2019.
This increased capacity will help Aurora Cannabis stock meet the increasing consumer demand in Canada. In addition to creating more dried flower, the company is making investments in their sold marijuana products.
For example, Aurora Cloud was recently launched. Aurora Cloud specializes in vape-ready CBD oils; its management stated that Aurora Cannabis stock is the only company that has “the only CBD vape-ready products that’s legal in Canada.”
Also, Aurora Cannabis stock has plans on producing single rolled products. On August 1, 2018, the company received their rights from Canna Royalty for some “pre-rolled Cannabis technology.” This technology allows them to produce pre-rolled joints and products at scale. The management team is already using obtaining orders from buyers in the adult-use market who are interested in using it.
Based on their previous experience and successful investments, Aurora Cannabis stock is expected to rise in 2019. Not only does the company believe in using high-end technology for marijuana production, but also becoming established in areas outside of Canada. Thus, we can expect to see great things from this company in the future.
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