Aurora and Tilray shares take a dip but Canopy holds up after earnings report

It’s been a wild ride for investors in three of Canada’s largest cannabis companies.

earnings report earnings stock price

Aurora Cannabis operates this large processing facility beside Edmonton's airport. Photo by Aurora Cannabis

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Canadian weed company stock prices surged in the first few days following the U.S. election. And Aurora Cannabis Inc. demonstrated the most spectaculer rise. But a new earnings report took some shine off the shares in the days leading up to Remembrance Day.

From November 4 through the end of trading on November 9, Aurora shares shot up a whopping 135 percent. On November 9, they peaked at $18.71 on November 9 before closing at $14.65.

However, less-than-stellar first-quarter results released that day sent the stock tumbling on November 10.

Aurora reported net quarterly revenue of $67.8 million. Its adjusted loss before income tax, depreciation, and amortization amounted to $57.9 million, according to the earnings report.

In advance of Remembrance Day, Aurora shares closed at $10.78. That wiped more than $300 million off the company’s value since the previous weekend.

This was driven, in part, by Jefferies Financial Group analyst Owen Bennett. In a note to investors, he declared that the stock’s performance didn’t match its financial results.

“Some may look at this performance, which also included gains of over 20% at one point intra-day today, and assume a much improved fundamental outlook and strong quarterly numbers,” Bennett wrote after the earnings report, according to MarketWatch.

“This is not the case, with Q1 [first quarter], for us, not really standing out as anything special or overly encouraging.”

It’s worth noting that Biden’s win initially buoyed cannabis investors.

After all, he promised to decriminalize weed at the federal level in the United States. Plus, election-night ballot measures legalizing recreational cannabis use passed in four states: New Jersey, Montana, South Dakota, and Arizona.

Tilray investors also see some ups and downs

For its part, Nanaimo-based Tilray Inc. experienced something similar to Aurora Cannabis, albeit on a smaller scale.

The NASDAQ-listed licensed producer’s stock rose by 23.15 percent on November 6 and a stunning 66 percent in the week of the U.S. election.

As a result of this momentum, Tilray shares closed on Friday at US$9.53 on NASDAQ. That left it with a market cap of US$1.22 billion.

But by the end of the trading day on November 10, Tilray shares had fallen to US$8.33. That was a decline of 13 percent in two trading days.

Tilray’s most recent earnings report, released on November 9, actually sent shares higher before they went into a tailspin the following day. It posted a third-quarter loss of US$2.3 million on sales of US$51.4 million.

“We realized solid year-over-year revenue growth in our core businesses and have achieved a significantly more focused, efficient and competitive cost structure, all of which position Tilray for future success,” CEO Brendan Kennedy said in a news release.

Canopy Growth shares retain value after earnings report

The most valuable of Canada’s weed companies, Canopy Growth Corp., also enjoyed a boost in its stock price in the week of the U.S. election.

Shares jumped 20.9 percent on the week to close at $30.59 in Toronto on November 6.

This lifted Canopy Growth’s market cap above $11.3 billion.

Unlike Aurora Cannabis and Tilray, Canopy Growth maintained that lofty price this week following release of its earnings report.

On November 10, Canopy Growth shares closed at $30.89 on the Toronto Stock Exchange.

This came on the heels of the company’s November 9 earnings report. It showed record quarterly net revenue of $135 million for the Smith Falls, Ontario–based licensed producer.

Even though there was a net quarterly loss of $97 million, investors were pleased by Canopy Growth’s increase in market share in the Canadian recreational-weed market.

In addition, investors appreciated its plans to achieve $150 million to $200 million in cost savings.

“Canopy Growth is positioned for continued growth as we establish a strong leadership position that is showcased through our vast portfolio of differentiated brands and products—including our industry leading cannabis-infused beverages,” CEO David Klein said in a news release.

Charlie Smith

I'm the editor of the Georgia Straight newspaper in Vancouver, as well as a CannCentral contributor.

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