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Aurora Cannabis’ Q3 Sales Fall 20%; Shares Up 3%

Shares of Aurora Cannabis (ACB) rose 3.2% in early trading Tuesday after the company posted lower sales, but a smaller loss in the fourth quarter of 2021 than a year earlier.

Aurora Cannabis is one of the world’s largest cannabis companies, serving both the recreational and the medical cannabis market. (See Aurora Cannabis stock charts on TipRanks)

Total net revenue for Q4 2021 came in at C$54.8 million, down 20% year-over-year. Aurora’s medical cannabis revenue increased 9% to C$35 million.

The average net selling price of cannabis rose to C$5.11 per gram in the fourth quarter, from C$3.60 in the prior-year quarter.

Aurora reported an adjusted EBITDA loss of C$19.3 million in Q4 2021, an improvement compared to an adjusted EBITDA loss of C$33.3 million in the prior-year quarter.

The company’s balance sheet remains solid with C$440.9 million in cash as of June 30, 2021. Working capital improved by C$404.3 million from the previous year.

Aurora Cannabis CEO Miguel Martin said, “We are now delighted to announce a long-term supply agreement with Cantek in Israel that we expect to provide us with a steady stream of high-margin revenue that could also evolve into a larger partnership over time.

“We further believe our Canadian adult recreational segment is poised for recovery due to our product portfolio enhancements coupled with an acceleration of new store openings and rising consumer demand.”

Aurora has identified cash savings of C$60-80 million and expects to achieve C$30-40 million in annualized cash savings over the next year, with the remainder by the end of the second quarter of fiscal 2023.

Following the results, Cowen and Co. analyst Vivien Azer reiterated a Hold rating on ACB and a price target of C$8.50. This implies 2.7% upside potential.

The rest of the Street is cautiously pessimistic on ACB with a Moderate Sell consensus rating based on five Holds and four Sells. The average Aurora Cannabis price target of C$8.69 implies 3.6% upside potential to current levels.

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