What happened

Shares of Aurora Cannabis (NASDAQ:ACB) were flying 18.5% higher as of 1:26 p.m. EDT on Tuesday. There were two likely factors behind the big gain. Jefferies analyst Owen Bennett upgraded Aurora to hold from underperform on Monday. Also, investors could be hoping for some good news with the company's fiscal 2020 Q4 update later today.

So what

It's probably best to not make too much out of Aurora's jump today. Both of the reasons behind the gain come with asterisks.

Cannabis with a green arrow pointing up and a stock chart in the background

Image source: Getty Images.

While Jefferies' Bennett upgraded the marijuana stock, he also slashed his price target by nearly 38% to $6.53. Aurora's shares currently trade well above that target. In addition, Bennett noted that the company continues to face liquidity challenges and will probably have to raise more cash.

What about the potential for good news from Aurora in its Q4 update? The company already provided a sneak peek at some of its results. And they weren't pretty. Aurora expects revenue to slip from Q3. Also, it's taking a staggering goodwill write-off of 1.8 billion Canadian dollars ($1.35 billion).

The company also pushed back its timeline for achieving positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to fiscal 2021 Q2. Aurora previously predicted that it would do so a quarter before that.

Now what

It's possible that Aurora's new CEO, Miguel Martin, could have some positive news to share in the quarterly update later today (at 5 p.m.). However, it's also possible that today's big gain could evaporate tomorrow. Aurora Cannabis remains a very risky bet.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.