Shares of Aurora Cannabis and other cannabis companies saw significant buying on Wednesday following Aurora’s quarterly earnings report.
For its most recent quarter, Aurora reported total net revenue of $88.2 million Canadian ($61.74 million), up 37% year-over-year, driven largely by a 51% jump in its global medical cannabis business.
In January, Aurora announced its launch of the company's first German-cultivated medical cannabis product, under the brand IndiMed. Manufactured at Aurora's leading EU-GMP facility in Leuna, Germany, the new brand offers a supply of high-quality, locally grown and sold, medical cannabis for the country's expanding patient base.
Cannabis stocks have been relatively poor performers since 2021 as the market appears to have been saturated following a large increase in legalization in the United States.
In early 2024, the Biden Administration made headlines as the possibility of legalization at the federal level was being discussed. Those headlines, as well as cannabis stock prices, have dropped significantly.
Today's surge in Aurora cannabis prices takes the stock back above the $5 level, a price that hasn't seen Since October 2024. The price hike is like what investors experienced in April 2024 after the Biden Administration's announcement.
Aurora Cannabis’ short interest ratio sits at 5.2. This tells us that short interest on the stock is relatively high. It also suggests that the stock is experiencing more of a short cover rally instead of a fundamental directional change.
From a technical perspective, investors should expect to see today's 40% increase fade over the next 4-6 weeks.
Shares of Aurora Cannabis still face significant technical pressure as they trade in a long-term bear market trend. The stock also faces pressure from its 200-day moving average, which is currently at $5.50, close to today's highs.
Barring additional fundamentally bullish news, Investors should expect that the stock will make its way back towards its recent lows at $3.50.
