Should you sell your Aurora Cannabis stock?

Roth Capital Markets analyst Bill Kirk reiterated a “Neutral” rating on Aurora Cannabis (Aurora Cannabis Stock Quote, Chart, News, Analysts, Financials TSX:ACB) and lowered his 12-month price target to C$5.00 from C$6.00 following what he described as a solid third-quarter beat that was quickly overshadowed by cautious implied fourth-quarter guidance.

In a Feb. 5 sales analysis, Kirk said enthusiasm around Aurora’s fiscal third-quarter results — net sales of C$94.2-million versus consensus of C$92.4-million and Adjusted EBITDA of C$18.5-million versus C$18.4-million — was tempered by management’s outlook, which points to a meaningful sequential slowdown.

At the midpoint of guidance, Aurora is implying fourth-quarter global cannabis net sales of about C$64-million and Adjusted EBITDA of roughly C$9.8-million, levels not seen since fiscal Q2/25. While Kirk acknowledged the inherent volatility tied to international shipments, he said the outlook warranted a more cautious stance despite Aurora’s differentiated EU-GMP infrastructure across its Ridge, River and Leuna (Germany) facilities.

For fiscal Q3/26, Aurora delivered modest margin improvement alongside the revenue beat. Adjusted gross margin rose to 62%, up from 61% in both the prior quarter and the year-ago period. Management also outlined strategic actions aimed at improving profitability, including further deemphasizing lower-margin consumer cannabis in certain provinces and reallocating product toward higher-margin channels, as well as restructuring its interest in Bevo AgTech, which will result in Bevo being treated as discontinued operations.

Kirk said the implied fourth-quarter guidance was the key negative. Management expects full-year medical cannabis net revenue of C$269-million to C$281-million, implying a notable sequential decline in Q4, while full-year Adjusted EBITDA of C$52-million to C$57-million also falls short of prior expectations.

By segment, medical cannabis continued to anchor results, growing modestly year over year and accounting for 81% of revenue and the vast majority of gross profit, driven primarily by international markets. Consumer cannabis continued to contract sharply, reflecting Aurora’s deliberate pullback from lower-margin opportunities, while plant propagation posted year-over-year growth but remained a smaller contributor.

Reflecting the deconsolidation of Bevo, Kirk revised his model lower. He now forecasts fiscal Q4/26 net sales of C$76.1-million and Adjusted EBITDA of C$10.7-million, and for fiscal 2027 net sales of C$343.1-million and Adjusted EBITDA of C$68.6-million, down from prior estimates.

While Kirk said the pipeline of international medical opportunities remains attractive, particularly as additional countries consider regulated cannabis programs, he maintained that upside remains too dependent on external regulatory developments. In his view, Aurora’s stable Canadian medical business and growing international medical footprint provide a solid profitability floor, but not enough visibility to justify a more constructive rating at current levels.

Aurora is a Canadian company engaged in the production, distribution and sale of cannabis products. The company was founded in 2006 by Terry Booth and Steve Dobler and is headquartered in Edmonton, Alberta.

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