Somewhat surprisingly, Aurora Cannabis (NASDAQ:ACB) seems to be the center of attention for many cannabis investors. It's the most popular pot stock on the Robinhood trading platform. Aurora's average trading volume has been much higher than its rivals in recent weeks. 

Last week's election results, combined with better-than-expected revenue in Aurora's fiscal year 2021 first quarter, appear to have increased investors' optimism. But there's a U.S. marijuana stock that's still running circles around Aurora: Curaleaf Holdings (OTC:CURLF). Here are three key ways that Curaleaf is beating Aurora.

Line trending up with cannabis and cash in the background.

Image source: Getty Images.

1. Diverging stock charts

Some investors reacted enthusiastically to Aurora's major rebound last week and early this week. However, it was easy to tell that the good times wouldn't keep rolling for long. Sure enough, Aurora's share price fell dramatically over the last couple of days.

It's important to understand that even if Aurora had kept its big recent gains, it would still badly underperform Curaleaf. The stock charts of these two cannabis companies have shown diverging paths throughout much of this year.


CURLF data by YCharts

Aurora and Curaleaf started out 2020 with market caps of close to $3 billion, with Aurora a little under that level and Curaleaf a little over it. Now, Curaleaf's market cap is more than four times greater than Aurora's. 

2. Soaring sales vs. stagnant sales

Curaleaf has absolutely clobbered Aurora when it comes to stock performance for a simple reason: Its business is booming while Aurora's isn't. Just look at the two companies' most recent quarterly results.

Curaleaf reported managed revenue of $121.4 million in the second quarter of 2020. This reflected a year-over-year increase of 120% and a quarter-over-quarter gain of 16%. The company estimated that its sales would have been $25.6 million higher without the negative impact of the COVID-19 pandemic, which hurt sales in Massachusetts and Nevada especially.

Meanwhile, Aurora posted fiscal 2021 Q1 revenue of 67.8 million in Canadian dollars (roughly US$52 million). Although this total came in a little higher than expected, it still represented a year-over-year decline of 10% and a sequential increase of only 0.4%. 

Curaleaf continues to gain share in the fast-growing U.S. cannabis market. Aurora is losing share in the Canadian recreational marijuana market, where the company makes more than half its total revenue. 

3. No contest in the battle of bottom lines

An even starker contrast can be found on the two companies' bottom lines. Neither is consistently profitable yet, but Curaleaf is much closer to reaching the important milestone.

Curaleaf posted a net loss of $2 million in its latest reported quarter, with its bottom line trending in a clearly positive direction. The company recorded all-time high adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $28 million, more than five times higher than its adjusted EBITDA in the prior-year period and up 40% from the previous quarter. 

How did Aurora fare in its latest quarter? The Canadian cannabis producer yet again reported a huge net loss, this time coming in at CA$107.2 million (around US$82 million). It generated an adjusted EBITDA loss of CA$57.9 million, nearly two times greater than its adjusted EBITDA loss in the previous quarter. 

Sure, one-time expenses made Aurora's numbers worse than they would have otherwise been. The company still hopes to deliver positive adjusted EBITDA next quarter. However, there's really no contest between Curaleaf and Aurora in the battle of bottom lines.

A potential catalyst

Some investors might hope that the U.S. elections will pave the way for some form of federal marijuana legalization that allows Aurora to enter the U.S. cannabis market. If this happened, it would definitely be a major catalyst for the stock.

However, the likelihood right now is that the GOP will retain control of the Senate. This means Sen. Mitch McConnell could hold onto his position as Senate Majority Leader and continue blocking cannabis bills from Senate votes.

Even if there are changes to federal cannabis laws, Curaleaf would probably emerge as a bigger winner than Aurora. The company could list its shares on a major U.S. stock exchange if the federal government recognized the authority of states to enforce their own marijuana laws. Curaleaf's head start in the U.S. market would also give it an edge over Aurora. Look for this U.S. marijuana stock to keep running circles around Aurora well into the future.

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.