When Will Aurora Cannabis Inc. (TSE:ACB) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at Aurora Cannabis Inc.'s (TSE:ACB) future prospects. Aurora Cannabis Inc., together with its subsidiaries, engages in the production, distribution, and sale of cannabis and cannabis-derivative products in Canada and internationally. The CA$383m market-cap company announced a latest loss of CA$55m on 31 March 2024 for its most recent financial year result. The most pressing concern for investors is Aurora Cannabis' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Aurora Cannabis

Consensus from 6 of the Canadian Pharmaceuticals analysts is that Aurora Cannabis is on the verge of breakeven. They expect the company to post a final loss in 2026, before turning a profit of CA$19m in 2027. The company is therefore projected to breakeven around 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 71%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Aurora Cannabis given that this is a high-level summary, but, take into account that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 9.5% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Aurora Cannabis which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Aurora Cannabis, take a look at Aurora Cannabis' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Aurora Cannabis worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Aurora Cannabis is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aurora Cannabis’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com