It’s easy to be down on a stock like Aurora Cannabis (NYSE:ACB). The stock has fallen more than 60% in the past 12 months, while the S&P 500 is up 18% over the same period. The company continues to issue more shares, and is struggling to grow and stay out of the red. But for one analyst from GLJ Research to suggest that the stock is worth zero seems extreme, even if you’re really bearish on pot stocks.
The stock has shown signs of life lately, coming off a fantastic month in November when it rallied close to 190%. Below, I’ll take a look at whether this is the start of a new, more positive trend for Aurora or if it really is in danger of going to zero and investors should jump ship.
A $0 price target is more attention-grabbing than it is realistic
To say that a company is worth zero would suggest its assets have next to no value — certainly not enough to cover its liabilities. And while you could discount items like intangible assets and goodwill, where valuations can sometimes heavily rely on estimates, Aurora would still have assets totaling 1.4 million Canadian dollars remaining as of Sept. 30 — more than double the CA$603,000 it listed in total liabilities…
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