Aurora Cannabis (NYSE: ACB) stock price plunged 30% in the last three months due to the broader market selloff. The marijuana stocks are struggling at the moment; the majority of them are trading close to the lowest level in this year.
North American marijuana index dropped to the lowest level since the beginning of 2018. The index is currently trading close to 175 points.
Aurora Cannabis stock price selloff accelerated in the past few weeks after lower than expected results from Canopy Growth, Tilray, and other key players. Tilray management disclosed that the average price per gram sold dipped by 28% to $4.61 due to oversupply in the market. Higher supplies, declining prices, and mounting valuations have been impacting the investor’s sentiments.
Aurora Cannabis stock price is currently trading slightly high from a 52-weeks low of $4.58. It had hit 52-weeks high of $12 a share in November 2018. Despite the massive selloff, Aurora Cannabis stock price is trading at higher valuations when compared to the industry average. Its stock is trading around 37 times to sales and 36 times to earnings relative to the industry average of 1.66 and 14 times, respectively.
On the positive side, Aurora Cannabis has reported solid preliminary results for the final quarter and fiscal 2019.
The company anticipates net revenues in the range of $100 million to $107 million – significantly higher from $19.1 million in the same period last year. Its Q4 revenue guidance is also substantially higher from revenue of $65.1 million in the previous quarter. The revenue for the fiscal year ended June 30, 2019, is expected to stand around $256 million. It anticipates total production available for sale at 30,000 kg, higher from previous guidance of 25,000 kgs.
Aurora Cannabis stock price performance could receive support from its financial numbers in the coming days. The growth in financial numbers would also help in soothing valuations. However, the complete stabilization and the formation of a bullish trend depend on the overall market environment.
