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May 20, 2020, 9:50 a.m. EDT

Aurora Cannabis stock's gains show investors rewarding revenue and ignoring losses: Raymond James

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By Ciara Linnane

Raymond James analysts said Aurora Cannabis Inc.'s /zigman2/quotes/210559470/composite ACB -0.39% /zigman2/quotes/203734337/delayed CA:ACB -0.22% strong stock gains following its recent earnings look overdone compared with the subdued response to stronger numbers from Organigram Inc. /zigman2/quotes/209289540/composite OGI +1.60% and Village Farms International Inc. /zigman2/quotes/207525872/composite VFF -2.30% . In a note looking at the three companies and their businesses, analysts Rahul Sarugaser and Michael Freeman said the market rewarded Aurora's better-than-expected revenue and overlooked its negative EBITDA. "You gotta be kidding me," the analysts wrote in a note to clients. Aurora's shares have gained 77% in the month to date. "As one of our observant colleagues pointed out: ACB's stock gained in value equivalent to twice that of OGI's entire market cap {about $250 million)-- or thrice that of Village Farms' market cap (@178 million)--after reporting a net loss equivalent to about 50% of OGI's market cap, or 75% of VFF's. Let that sink in," the analysts wrote. Organigram and Village Farms are well operated companies that consistently report positive EBITDA and are capturing market share, said the note. Aurora shares were down 4.5% premarket and are down 43% in the year to date, while the Cannabis ETF /zigman2/quotes/213173823/composite THCX -1.87% has fallen 24% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.06% has fallen 10%.

/zigman2/quotes/210559470/composite
US : U.S.: NYSE
$ 10.27
-0.04 -0.39%
Volume: 1.92M
Aug. 7, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.16 billion
Rev. per Employee
$94,401
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/zigman2/quotes/203734337/delayed
CA : Canada: Toronto
$ 13.65
-0.03 -0.22%
Volume: 816,607
Aug. 7, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.54 billion
Rev. per Employee
$123,163
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/zigman2/quotes/209289540/composite
US : U.S.: Nasdaq
$ 1.27
+0.02 +1.60%
Volume: 2.14M
Aug. 7, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$241.31 million
Rev. per Employee
$49,972
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/zigman2/quotes/207525872/composite
US : U.S.: Nasdaq
$ 5.96
-0.14 -2.30%
Volume: 464,252
Aug. 7, 2020 4:00p
P/E Ratio
209.12
Dividend Yield
N/A
Market Cap
$342.15 million
Rev. per Employee
N/A
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/zigman2/quotes/213173823/composite
US : U.S.: NYSE Arca
$ 9.96
-0.19 -1.87%
Volume: 30,072
Aug. 7, 2020 4:00p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
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