Aurora Cannabis: Buy, Sell or Hold?

Roth Capital Partners analyst Bill Kirk says Aurora Cannabis’ (Aurora Cannabis Stock Quote, Chart, News, Analysts, Financials TSX:ACB) fiscal Q1 results were largely in line, while guidance for sequential growth should ease some near-term uncertainty.

In an Aug. 6 update, Kirk reiterated his “Neutral” rating and $4.00 target on Aurora.

Aurora reported fiscal Q1 revenue of $67.6-million, in line with consensus at $67.5-million, while Adjusted EBITDA was $3.4-million, ahead of consensus at $2.4-million and slightly below Kirk’s $3.5-million estimate.

“Importantly, Aurora is guiding to 2Q revenue and adj. EBITDA growth, which should alleviate some uncertainty,” Kirk said. “Canadian Veteran reimbursement changes are offsetting underlying operational strength.”

Aurora’s adjusted gross margin was 58%, down from 60% in Q4 and 64% a year earlier. Kirk said the company’s gross margin remains a strength, reflecting its focus on high-quality medical cannabis and efficient production.

Management maintained its fiscal 2027 outlook, including revenue more in line with fiscal 2025 cannabis revenue, adjusted gross margin in the mid- to high-50% range and adjusted SG&A in line with fiscal 2026. Adjusted EBITDA is still expected to decline year-over-year, mainly because of Canadian reimbursement pricing changes.

Medical cannabis revenue fell 1.2% year-over-year, with 17.1% international growth offset by a 25.2% decline in Canada. Medical cannabis represented 95% of revenue and more than all gross profit in the quarter.

Kirk said Aurora continues to prioritize international medical opportunities over domestic adult-use sales, which supports its margin mix, though Canadian reimbursement changes remain a drag.

Consumer cannabis revenue fell 75% year-over-year and 42% sequentially.

Kirk said Aurora’s EU-GMP infrastructure at Ridge, River and Leuna, Germany gives it an advantage in growing international medical markets, including Australia, Germany, Poland, New Zealand and the United Kingdom.

For fiscal Q2, Kirk forecasts revenue of $72.2-million and Adjusted EBITDA of $5.1-million, unchanged from his previous estimates. For fiscal 2027, he now expects revenue of $297.7-million and Adjusted EBITDA of $22.7-million, down slightly from $299.5-million and $22.8-million.

“Sector sentiment and Aurora upside is still unjustifiably tied to U.S. regulatory change,” Kirk said.

The analyst said Aurora’s balance sheet is much improved and its gross margin structure remains among the strongest in Canadian cannabis. As added capacity helps meet unmet demand, he expects Aurora to resume growth.

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