Aurora Cannabis (ACB, $13.73) to layoff 700 workers, close 5 facilities, and take $60 million charge

Aurora Cannabis announced that it was retrenching about 700 employees, and closing five production facilities. It is also taking a $60 million charge for the quarter ending June 30.

The layoffs include  an approximate 25% reduction in Aurora's SG&A [selling, general and administrative] staff, most with immediate effect, and an approximate 30% reduction in production staff over the next two quarters, according to the cannabis company’s statement.

Aurora plans to shutter operations at five facilities over the next two quarters ,in order to orient itself more towards production and manufacturing at the company's “larger scale and highly efficient sites”, as indicated in the company’s statement.

The company expects to record production asset impairment charges of up to $60 million for Q4 2020. It also expects to record a charge of up to $140 million in the carrying value of certain inventory.

Tickeron's AI-powered scorecard rates Aurora Cannabis a STRONG SELL.

ACB enters a Downtrend because Momentum Indicator dropped below the 0 level on June 05, 2020

This indicator signals that ACB's price has further to drop, since it moved below its price 14 days ago. Traders may consider selling the ticker, shorting the ticker, or exploring put options. In 72 of 84 cases where ACB's Momentum Indicator fell below the 0 level, its price fell further within the subsequent month. The odds of a continued Downtrend are 86%.

Current price $13.65 crossed the support line at $13.19 and is trading between $14.63 resistance and $13.19 support lines. Throughout the month of 05/20/20 - 06/22/20, the price experienced a +8% Uptrend. During the week of 06/15/20 - 06/22/20, the stock enjoyed a +4% Uptrend growth.

Technical Analysis (Indicators)

Bearish Trend Analysis

The RSI Indicator appears to be shifting from an Uptrend to a Downtrend. In 24 of 40 cases where ACB's RSI indicator exited the overbought zone, the price fell further within the following month. The odds of a continued Downtrend are 60%.

The Moving Average Convergence Divergence (MACD) crossed below the signal line. In 34 of 42 cases where ACB's MACD histogram became negative, the price fell further within the following month. The odds of a continued Downtrend are 81%.

Bullish Trend Analysis

The Stochastic Indicator shows that the ticker has stayed in the oversold zone for 7 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ACB advanced for three days, in 219 of 266 cases, the price rose further within the following month. The odds of a continued Uptrend are 82%.

The lower Bollinger Band was broken -- a price increase is expected as the ticker heads toward the middle band, which indicates a buy or call consideration for traders. In 33 of 39 cases where ACB's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued Uptrend are 85%.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 59%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.69.

The Tickeron PE Growth Rating for this company is 99 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is 99 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Valuation Rating of 94 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.55) is normal, around the industry mean (0.93). P/E Ratio (0.00) is within average values for comparable stocks, (29.45). Projected Growth (PEG Ratio) (0.00) is also within normal values, averaging (115.92). Dividend Yield (0.00) settles around the average of (1.00) among similar stocks. P/S Ratio (4.63) is also within normal values, averaging (10.69).

The Tickeron Profit vs. Risk Rating rating for this company is 93 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ACB’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock worse than average.

The Tickeron Price Growth Rating for this company is 63 (best 1 - 100 worst), indicating fairly steady price growth. ACB’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.