Aurora Cannabis (TSX:ACB)(NASDAQ: ACB), a leading international cannabis producer, recently posted its third-quarter results for fiscal year 2024. It also announced the acquisition of MedReleaf Australia as it looks to grow its position in international cannabis markets. Is the stock on the right path to turning things around?
Aurora reported a net revenue increase to $64.4 million in Q3 2024, higher than the $61.1 million it posted in the prior-year period. The growth was primarily due to a stronger performance in its global medical marijuana business.
The company also showed improvement on the bottom line, with adjusted EBITDA of $4.3 million coming in higher than what it reported in the same period last year -- $3 million. This marks the fifth straight quarter where the company has posted positive adjusted EBITDA.
Aurora expects it acquisition of MedReleaf Australia to be immediately accretive to Adjusted EBITDA, which could further improve its financial results. With the acquisition, the company says it is now “the largest global medical cannabis company in nationally legal markets.”
With growth options limited in a highly competitive Canadian market, Aurora has been looking internationally for expansion. That has allowed it to improve its margins and thus, strengthen its financials. Unfortunately, investors remain unimpressed. In the past 12 months, the stock has fallen nearly 60%.
Aurora Cannabis does appear to be on a more positive track now that it is focusing on international markets. But investors shouldn’t forget adjusted EBITDA is only an adjusted earnings calculation; Aurora still incurred a net loss of more than $25 million last quarter. And with only a modest growth rate to show for its international expansion, it doesn’t make for much of a growth stock.
Until it can become profitable on an accounting basis or get back to generating double-digit growth, investors are better off avoiding the stock as it still has a long way to go in proving it can be viable investment.
