The recent success of Aurora Cannabis has pushed up the price of the stock. Since I’m not a big fan of Aurora I decided to look at another pot stock. I found one that could be much higher. This stock is trading at only $2.60 a share. That is a bargain compared to the current market price of Aurora Cannabis ($5.10).
Aurora Cannabis (ACB) is one of the biggest players in the Canadian marijuana market, and its success has brought it to the forefront of public consciousness. It’s also the most expensive pot stock on the market, with a market cap of over US$13 billion. When I first learned about the company, I was interested to see how it would perform in this space, and to help others make an informed investment decision, I decided to create a short article on the company.
In my opinion, this is the best cannabis stock to own.. Read more about why is aurora stock so low 2021 and let us know what you think.
Canadians interested in making exponential returns may consider investing in the cannabis industry. Cannabis was allowed for recreational use in Canada nearly three years ago, and it’s now conceivable that marijuana may be legalized at the federal level in the United States as well. While Canadian cannabis companies like Aurora Cannabis (TSX:ACB)(NYSE:ACB) are dealing with lower-than-expected demand, negative profit margins, and a host of other structural problems, their rivals south of the border continue to expand at a blistering rate.
The cannabis industry in Canada is expected to increase from $2.6 billion in 2020 to $6.4 billion in 2026. By the end of 2025, the legal marijuana industry in the United States is expected to exceed US$40 billion in sales.
The stock of Aurora Cannabis has dropped 95% from its all-time highs.
Aurora Cannabis, the Canadian marijuana company, is still popular with investors, but it has burned through a lot of money in the past two years. The stock of ACB has down 95% from its all-time highs and is down 17% year to date.
Aurora’s net cannabis sales were down 21% year over year in the third quarter of fiscal 2021 (which ended in March), while recreational sales were down 53%. ACB recorded an operational loss of $232 million in the first three quarters of fiscal 2021, which was 18% lower than the prior-year period.
ACB’s management had predicted a positive EBITDA for the quarter ending in September 2020, but this goal seems to be a long way off right now. Aurora Cannabis has eroded shareholder value at a fast rate to fund its enormous cash burn by raising stock capital multiple times. Aurora’s outstanding shares have increased from 1.3 million in 2014 to over 200 million in March 2021.
Despite the stock’s recent drop, experts remain pessimistic about the marijuana behemoth. Aurora Cannabis’ average 12-month price target is $8.43, which is lower than its current trading price of $8.76.
Green Thumb Industries is on the verge of being profitable.
Green Thumb Industries (CNSX:GTII) is racing towards profitability while ACB is struggling with negative margins. Green Thumb is a cannabis stock headquartered in the United States with revenues expected to rise from $556 million in 2020 to $1.19 billion in 2022. During this time, its profits are expected to increase from US$0.07 per share to US$0.68 per share.
Green Thumb revenue increased 85.4 percent year over year to US$221.9 million in the second quarter of 2021. It also recorded a net profit of US$22.1 million, up from a loss of US$12.9 million the previous year.
Given its market capitalization of $6.4 billion, Green Thumb may seem to be overvalued. The cannabis industry leader’s strong growth and increasing profit margins, on the other hand, make it an appealing option for long-term growth investors.
In the United States, over 20 states have legalized recreational and medicinal marijuana, and Green Thumb already operates 62 dispensaries throughout the nation. Green Thumb is a cannabis company with a solid balance sheet, expanding margins, and outstanding revenue growth. It has a cash balance of US$359 million and debt of less than US$200 million.
So many cannabis stocks have been hit with negative publicity lately that it’s great to see one making headway. Aurora Cannabis (TSX:ACB) was a stock that I never had much interest in at first, mainly because it was exposed to the Canadian cannabis market that I couldn’t see topping the massive success of the Canadian licensed producer market. But after seeing the recent run up in the stock, I’ve come to realize that the company has a lot more going for it than initially meets the eye.. Read more about 7 stocks to buy and let us know what you think.
Related Tags
This article broadly covered the following related topics:
- hot shares to buy
- top 5 shares to buy today
- stocks worth buying today
- best shares to buy in 2019
- short term stocks to buy today
