Aurora Cannabis (NYSE: ACB) has earned investor attention this year for one tough reason -- it's desperately trying to recover from a disastrous 2019. The stock dropped 56% last year, compared to the industry benchmark Horizons Marijuana Life Sciences ETF's decline of 36%. There were various external headwinds in Canada, such as regulatory delays that led to fewer legal stores, which allowed the black market to thrive. Furthermore, Aurora made rather haphazard spending decisions in a series of acquisitions and expansions, which have increased the company's debt burden. As of March, the company was toting a total debt of CA$593 million.
Cannabis sales have increased this year amid the pandemic, as the product continues to behave more like a consumer staple. Although revenue numbers look promising, profitability is still in question for many marijuana companies, including Aurora Cannabis. Aurora made some operational changes in June, which it calls "facility rationalizations," to reduce costs and improve its overall financial health. To what extent these measures have helped will be clearer when the company reports its fourth-quarter results on Sept. 22.
The company gave a sneak peek of where it is heading with its preliminary Q4 results and some other business updates on Sept. 8. And unfortunately, they weren't exactly appealing. Aurora's market cap has slipped from $812.7 million at the start of the year to $793 million as of Sept. 16. Let's take a look at the company's early updates before deciding whether the stock is a buy during its dip, or if savvy investors should stay far, far away.