Aurora Cannabis (ACB) Stock Climbs On Revenue & Election Results

Aurora Cannabis ACB Stock News

Aurora Cannabis Inc (NYSE: ACB) is climbing in the premarket hours this morning, trading on gains of around 30% early on. The gains come after the company announced its financial results for the first quarter, beating revenue expectations. However, that’s not the only thing driving the price higher. The gains can also be linked to the fact that Joe Biden will be the next United States President. Here’s what’s going on:

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ACB Stock Gets A Boost From Strong Q1 Revenue

In the earnings release, Aurora Cannabis said that it generated a loss of C$107.2 million, or US$82.6 million, in the quarter. The the loss was upsetting, it was a major improvement over the loss of C$1.85 billion posted in the previous quarter.

Moreover, revenue proved to be overwhelmingly positive. Revenues came in at C$67.8 million, up slightly from C$67.5 million generated in the previous quarter. Analysts expected that revenue would decline to C$63.6 million.

In a statement, Miguel Martin, CEO at ACB, had the following to offer:

We continue to take the necessary steps to execute our plan and transform our business to achieve sustainable profitability, and ultimately positive cash flow,” stated Miguel Martin, Chief Executive Officer of Aurora Cannabis. “Our Q1 2021 results are transitional but do highlight successes across a number of diverse profit pools. We remain the leader by revenue in the high-margin Canadian medical market, our international medical business experienced more than 40% net revenue growth this quarter, and our CBD brand Reliva is #1 ranked by Nielsen in the U.S. CBD sector.

While we are not satisfied with our past performance in the growing Canadian consumer business, we have a sense of urgency in the execution of our tactical plan to grow profitable market share. Our efforts are directed at delivering the highest quality products, refocusing on our leading premium and ultra-premium brands, better allocating our sales and marketing spend, and executing key account partnerships at both the province and retail levels.

We have also taken action to improve our liquidity and strengthen our balance sheet. It was a responsible decision to raise capital using our ATM in today’s environment and the cash is expected to ensure we have the runway needed to compete with our peers. Cannabis companies are being evaluated on both their business performance and liquidity and we wanted to ensure that we are addressing both. I remain confident in Aurora’s prospects and it is my utmost priority to secure our winning future.

The Joe Biden Win Expands The Gains

I don’t want to discount the positive financial results released by Aurora Cannabis this morning. However, there’s likely another driver to the positive movement in ACB stock this morning.

Over the weekend, it was announced that Joe Biden won the election and will be the next President of the United States. In recent years, state-level regulatory reform swept the United States, primarilly driven by republican politicians under the promise that cannabis tax revenues would allow for improvements across the state.

Joe Biden has a pretty expensive plan, but that plan could be possible if enough tax revneue is driven. Many suggest that legalizing cannabis on a federal level will be one of the ways that the Biden Administration wil increase tax revenues in the United States.

Considering this, a Joe Biden presidency is great news for ACB stock and others across the cannabis sector.

COVID-19 Vaccine

Finally, another potential driver for the positive movement today is the fact that Pfizer and BioNTech released data from a COVID-19 that demonstrated a 90% effectiveness rate. That’s strong enough that there may be an emergency use authorization put in place in weeks and the vaccine could hit the market before the end of the year.

As a result of the news, the stock market is screaming for the top. The idea that economies will be able to operate without fear suggests that gains are likely ahead for companies across the board. That’s why we’re seeing a historic rally in the premarket hours this morning. Nonetheless, with the news pushing the overall market for the top, it’s hard to discount its involvement in the gains in ACB stock this morning.

The Bottom Line

For Aurora Cannabis, the news today is good from all angles. The company beat expectations with regard to Q1 revenues, a democrat is going to take over the White House, and a COVID-19 vaccine signals the potential end of the pandemic. All in all, today is a great day for ACB and its investors.

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