Buy Aurora Cannabis on Dips Before Marijuana Industry Skyrockets
In the last year, Aurora Cannabis stock has fallen 54 percent. Is the stock a buy or sell at this price? How's the company's outlook and what can investors expect?
Jan. 8 2021, Published 8:14 a.m. ET
On Jan. 7, Aurora Cannabis stock fell by 0.8 percent, while the S&P 500 rose by 1.5 percent. The stock was down $0.08 from its previous closing price of $10.27 on a volume of 35,801,610 shares. Over the past year, the S&P 500 has risen by 16.2 percent, while Aurora Cannabis stock has lost 54.4 percent. Is Aurora Cannabis stock a buy or sell at this price?
On Jan. 7, cannabis stocks like Aurora Cannabis, Aphria, Tilray, and OrganiGram Holdings continued the upward momentum in the early trade. The marijuana companies reacted to the Georgia runoff election results. The marijuana market is about to witness a massive growth explosion after marijuana use and sales are legalized at the federal level in the U.S.
Aurora Cannabis or ACB on Stocktwits
Aurora Cannabis stock has become a major talking point on social media platforms. A user named mcornack on Stocktwits said that marijuana stocks would rise again. The user suggests that investors accumulate Aurora Cannabis stock on dips and wait for federal legalization in the U.S.
Another user by the name RunningBulls007 said that institutions would soon start loading ACB stock with the new Democratic and marijuana-friendly administration. The investor added that Aurora Cannabis is already set up to produce and distribute marijuana, so the company will be first in line when marijuana is legalized.
Aurora Cannabis doesn't pay dividends
Currently, Aurora Cannabis doesn’t pay dividends like other cannabis stocks.
Aurora Cannabis's valuation
On Jan. 7, Aurora Cannabis stock fell by 0.8 percent and closed at $10.19. At that closing price, the market capitalization was $1.86 billion. Aurora Cannabis stock trades at an EV-to-sales multiple of 7.43x. Since the marijuana company isn't reporting a net income right now, it doesn't have a PE multiple.
Aurora Cannabis or ACB's stock forecast
Aurora Cannabis stock has risen by 22.6 percent in the last five days, while it has fallen by 54.4 percent in the last year. The stock is trading 63.4 percent below its 52-week high of $27.84 and 174.7 percent above its 52-week low of $3.71.
According to estimates compiled by CNN, analysts' median target price is $8.48 for Aurora Cannabis, which is 16.9 percent below its current stock price. Among the 17 analysts tracking Aurora Cannabis, one recommends a buy, 12 recommend a hold, and four recommend a sell. The highest target price of $12.34 is 20.9 percent above the stock's current price, while the lowest target price of $3.60 is 64.7 percent below the stock's current price.
ACB stock looks like a buy
Investors should buy Aurora Cannabis stock on dips based on the strong growth outlook. The stock will likely bounce since Democrats got the majority in the Senate. The MORE (Marijuana Opportunity Reinvestment and Expungement) Act could be passed and marijuana could be decriminalized at the federal level. The global legal marijuana market is on track to hit $73.6 billion in 2027 compared to $17.7 billion in 2019.