Aurora Cannabis (ACB) Earnings Play: Smart Bet or High-Risk Gamble?

ACB bulls are loading up ahead of earnings—but this isn''t your grandma''s blue-chip stock.

Volatility alert: Aurora''s 30-day implied move sits at 23% as traders price in a binary outcome. The cannabis play has burned shorts and bulls alike in recent quarters.

Key metrics to watch:

- Gross margins: Last quarter''s 46% surprised Wall Street. Another beat could trigger short covering.

- Cash burn: The $180M war chest won''t last forever. Guidance on path to profitability is crucial.

- International sales: Germany''s legalization boost hasn''t materialized yet. Any hints of European traction?

Bottom line: This remains a trader''s stock, not an investor''s. The earnings call might as well come with a blackjack table and free drinks—just don''t bet the farm. After all, what''s a cannabis stock without a little... organic growth?

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One of Aurora’s key strengths has been its medical cannabis business, particularly in international markets, where sales increased by 112% year-over-year in the previous quarter. This resulted in a 37% increase in total revenue, alongside a record-high adjusted EBITDA of $23.1 million, which equated to a growth of 316% and marked the ninth consecutive quarter of positive adjusted EBITDA. The firm also has a healthy balance sheet with about $180 million in cash and no cannabis-related debt.

As the earnings date approaches, investors should focus on whether or not Aurora can stay profitable and beat the $0.09 EPS estimate. Also important will be what the company says about its Canadian recreational sales, how it plans to keep costs down, and investments for further growth. It is worth noting that Aurora stock is up nearly 44% on the year, so a strong report could keep that rally going, while a weak one could trigger a significant pullback.

Options Traders Anticipate a Large Move

Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings MOVE is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a large 15.6% move in either direction.

Is ACB Stock a Good Buy?

Using TipRanks’ technical analysis tool, the indicators seem to point to a positive outlook for ACB stock. Indeed, the summary section pictured below shows that 13 indicators are Bullish, compared to five Neutral and four Bearish indicators.