Aurora Cannabis has been no stranger to problems these days. Its shares have plunged more than 40% in the last three months. Aurora missed expectations with its fiscal 2019 Q4 results. Analysts have piled on with negative views and cutting its one-year price target by more than 30%. The Canadian cannabis producer needs some good news to renew investors’ confidence in the next year.
Aurora Cannabis stocks are one of the top cannabis stocks in the industry. However, it has fallen more than 40% since the beginning of the year.
Those losses are nearly 60% when looking at the past six months. Other companies have incurred even bigger losses along the way. But as bad as things have been this year, 2020 could be a whole lot worse.
Analyst assessment of Aurora Cannabis stocks
Out of a total of six analyst ratings for Aurora Cannabis stocks over the past 12 months, four are “Buy”, two “Hold” and zero “Sell.” On average, this means a “buy” rating for the security. There are no analyst updates on Aurora Cannabis stocks from last month.
An average of $9.35 is calculated from the price targets given. This means that the share could rise by 159.41% from the last closing price of $4.78. The resulting recommendation is “Buy.” In summary, Aurora Cannabis stocks receive a “buy” rating from the analysts.
Aurora Cannabis is expected to have a huge increase in the case cost to produce per gram and gross margin. The cash cost to produce per gram fell 20% to $0.86 per gram.
Technical analysis of Aurora Cannabis
Aurora Cannabis didn’t deliver most of its promises when it increased the guidance. However, the results weren’t completely bad news.
The Aurora Cannabis stocks with a price of $4.78 are now -12.77% away from the moving average of the past 50 days. This leads to the short-term assessment “Sell.”
On the basis of the past 200 days, however, the classification is “Sell” since the distance to the GD200 amounts to -46.35%. In this respect, we assess the share as a “sell” for the two periods as a whole.
Did Aurora Cannabis stocks deliver as promised?
Aurora Cannabis stocks achieved a performance of -52.62% in the past 12 months.
However, similar shares from the “pharmaceuticals” industry rose by 64.19% on average, which represents an underperformance of -116.81% for Aurora Cannabis in the industry comparison.
The healthcare sector had an average return of 48.49% last year. Aurora Cannabis was 101.11% below this average.
The underperformance in both industry and sector comparison leads to a “sell” rating in this category.
Relative strength index
The Relative Strength Index (RSI), a technical analysis indicator, can be used to determine whether a security is “overbought” or “oversold.”
To do this, the upward and downward movements of an underlying asset are correlated over time. Let’s look at the RSI of the last seven days for the Aurora Cannabis share: the current value is 45.98.
As a result, the security is neither oversold nor sold, so we give it a “hold” rating. The RSI of the last 25 trading days is less volatile than the RSI7 and complements our analysis with a longer-term view.
As with the RSI7, Aurora Cannabis stocks are neither overbought nor sold on this basis (value: 51.26). The security is therefore also rated “Hold” for the RSI25. Overall, the analysis of the RSIs on Aurora Cannabis stocks thus provides a “Hold” rating.
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