Canaccord's Takeaways From Aurora's First Full Quarterly Earnings Print

Cannabis company Aurora Cannabis Inc ACB reported Monday with its first full-quarter results, which showed that the company held a 20-percent market share of recreational volumes in 2018, according to Canaccord Genuity.

The Analyst

Analyst Matt Bottomley maintains a Speculative Buy rating on Aurora with an unchanged CA$13 ($9.80) price target on the Canadian-listed equity.

The Thesis

Aurora's Q2 report was highlighted by revenue of CA$54.2 million, near the high end of management's own guidance range and inline with expectations, Bottomley said in a Tuesday note.

Sales of recreational cannabis totaled CA$21.6 million, which gives the company the second-highest market share in the Canadian recreational space, the analyst said. This solidifies strong execution from management at a time when many producers went through logistical supply chain problems, he said.

Aurora achieved an estimated gross price of less than CA$6 per gram of dried bud and less than CA$10 per equivalent gram of oil in the quarter — both of which were better than expected, Bottomley said.

The company is in the process of integrating multiple new platforms as a result of acquisitions made over the past few quarters, including MedReleaf and Anandia Labs. Investors should be paying close attention to signs of success in integrating the acquired properties over the next few quarters, according to Canaccord.

Price Action

Aurora Cannabis shares were up 3.14 percent at $7.39 at the time of publication Tuesday.

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