HomeInvesting NewsAurora Cannabis Stock; Reasons Behind Today's Decline

Aurora Cannabis Stock; Reasons Behind Today’s Decline

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Aurora Cannabis Stock (NASDAQ:ACB)

Aurora Cannabis (NASDAQ:ACB), a cannabis producer based in Canada, released its earnings for the fiscal year 2022 fourth quarter and full year on Tuesday evening. The market was unimpressed by the company’s performance. Aurora Cannabis Stock fell by 12% during the first few minutes of trade on Wednesday, and it was still trading 6.8% lower as of 11:54 a.m. Eastern Time.

Then What?

The magnitudes of Aurora Cannabis Stock’s actual and adjusted losses blew the minds of the analysts who looked into the company. The non-cash impairment charge amounted to $377 million and contributed about $362 million to the company’s net loss for the quarter that ended on June 30. Even without considering the impact of that penalty, the adjusted loss of $85 million was far higher than the loss of $31.8 million that analysts anticipated, according to FactSet Research. Aurora Cannabis’s (NASDAQ:ACB) bottom line improved over the prior year, which saw a loss of $100 million.

What’s Next?

Aurora Cannabis (NASDAQ:ACB) explained that the significant impairment charges “were prompted by changes in cannabis market circumstances, as well as in the present capital market climate, including higher rates of borrowing and lower foreign exchange rates.”

However, the Aurora Cannabis Stock report also contained some encouraging information. The company’s revenue from its medicinal cannabis business on a global scale increased by 35.4% as compared to the previous year. The management stated that the company’s success was due to its expanding presence in several significant new cannabis markets.

Aurora Cannabis (NASDAQ:ACB) also reaffirmed its forecast that it will be able to turn a profit on an adjusted EBITDA basis (profits before interest, taxes, depreciation, and amortization) by the time the calendar year 2022 comes to a close. This could be a factor in explaining why the stock was able to recover some of its early losses on Wednesday morning. If it cannot accomplish that objective, investors should probably prepare themselves for additional declines in the price of Aurora Cannabis Stock.

Featured Image-  Megapixl @ Timonschneider

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