Aurora Cannabis Inc (TSX:ACB)(NYSE:ACB) is down 24% in just the past month as things have gone from bad to worse for shareholders. It was only a year ago that shares of the pot stock were trading at more than $12 but now it seems to be a distant memory.
There’s little hope of Aurora getting back to those levels as the company has routinely disappoint investors with poor earnings results. And forecasting little growth for the upcoming quarter certainly doesn’t help that, either.
Currently, the stock is trading at a little more than five times its sales, which is very low compared to where it’s been in the past. Multiples of 50, 70, times revenue weren’t uncommon for the stock in the past year.
It’s definitely a lot cheaper, but whether it’s a good buy is another story. But there are a couple of reasons investors may want to consider buying the stock today.
The first is that expectations are low for Aurora. The company previously said that it expected ‘modest to no growth’ for the upcoming quarter.
Growth has been a challenge but with the launch of edible products likely adding to its revenue, investors may be a bit surprised at such a poor outlook. Unless of course the company simply wanted to bring down expectations and put less pressure on itself.
Secondly, sales of cannabis have been very strong amid the coronavirus pandemic and that could make the quarter a pleasant surprise for the company. It’s still a risky buy, but it may not take much for shares of Aurora to pop.
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