Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
Over the last six months, Aurora Cannabis Inc. (NYSE:ACB) shares have fallen 73.28%.
The Aurora Cannabis Analyst
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Needham analyst Matt McGinley initiated a Hold rating on Aurora with a price target of $1.50.
The Aurora Cannabis Thesis
The Canadian cannabis market has seen too many investments so far, outpacing market development, which has further caused the need for infrastructure rationalization. To make it in these circumstances, McGinley says Aurora has set up itself as a "low cost producer with toeholds in many markets."
Nevertheless, the company is still unprofitable, and just like the competition, it's now forced to desperately minimize its operating structure while working on boosting its revenue at the same time.
McGinley still sees a possibility for the company to reach a positive EBITDA by 2021, pointing out that "any shortfalls in cost reduction or market development places the company at liquidity risk in 2H20."
Want Private Access to Benzinga Analyst?
Check out the latest strategies our team of experts are using every week so that you can always adapt to the market like the pros!—Get FULL Access to This Week's Webinar Here.
"Over two quarters, ACB must cut SG&A by 50%+ to $45mn, sustain a 50%+ GM, and grow revenue 33% to $90mn to meet positive EBITDA loan covenants," he wrote in the note.
The analyst thinks that things in Aurora's hands, like restructuring. will have more power than industry revenue growth in the near future, but he also projects harsh stock volatility.
"While industry valuation mean reversion is likely, ACB’s near-term cuts likely matter more than revenue, and we view carrying a 50%+ borrow as difficult and likely to create high levels of volatility for ACB equity."
ACB Price Action
Aurora's stock was trading lower by 1.9% to $1.52 per share at time of publication.
Related Links:
Tim Seymour Compares Aurora Cannabis And Canopy Growth, Sees Path To Profitability
Here's How Much Investing $100 In The 2018 Debut Of Aurora Cannabis Would Be Worth Today
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.