Aurora Cannabis (NYSE: ACB) released its quarterly results last week, which failed to impress investors as the stock has fallen since then. Although the company showed significant sales growth from the previous year, there were still some areas of concern that should have investors thinking twice about whether to buy the stock today.
Perhaps the most disappointing result of all was that the company's net revenues of 98.9 million Canadian dollars fell short of the range that Aurora said it expected its sales to fall within just a month earlier. In an update issued by the company, Aurora expected sales, net of excise tax, to fall between CA$100 million and CA$107 million. Missing analyst expectations isn't uncommon for the industry, but a company missing its own forecasts that it updated just a month earlier is a whole different story.
For investors, that's a big problem: If the company can't forecast what it will report one month in advance, it's hard to believe that any guidance the company issues will be any more accurate. It would be hard to trust Aurora's guidance for a year if it's struggled with such a short-term projection on results that have already happened. It doesn't instill a lot of confidence in the company's projections, and that's a big problem, as it may have investors second-guessing other forecasts, as well.