Aurora Cannabis (ACB 0.95%) has ranked among the most widely followed pot stocks for years. However, there's a rising star that has largely eclipsed Aurora this year -- Sundial Growers (SNDL 2.22%). Thanks in large part to the Reddit community, Sundial jumped into the center of attention for marijuana-focused investors several months ago.

However, Sundial isn't just beating Aurora when it comes to grabbing the spotlight these days. Here's how Sundial trounced Aurora in their latest earnings updates.

A gloved hand holding a cannabis leaf in front of a Canadian flag.

Image source: Getty Images.

Sundial's surprise

Aurora Cannabis has promised for a long time that it's on a solid path to generate positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). This promise still hasn't been met. The company reported an adjusted EBITDA loss of 24 million in Canadian dollars in its quarterly update last week.

CFO Glen Ibbott stated in Aurora's fiscal 2021 third-quarter conference call that the company is "confident" that it will achieve a positive EBITDA run rate within the next 18 months. You couldn't blame investors for being skeptical after the company's past performance of overpromising and underdelivering.

Meanwhile, Sundial Growers showed that it was more action than talk with its first-quarter results reported earlier this month. The Canadian cannabis producer gave investors a pleasant surprise, posting positive adjusted EBITDA for the first time ever of CA$3.3 million. 

Sure, Sundial's feat was made possible primarily by its investment gains and income from cannabis investments. However, there's an old saying: "Don't look a gift horse in the mouth." The bottom line is that Sundial delivered on what Aurora has only been promising.

Bleakness on both sides

There was a lot to dislike, though, about both companies' quarterly updates. Aside from a few bright spots, the results looked bleak for both Aurora and Sundial.

Of especially serious concern, Aurora and Sundial reported declining revenue. Aurora's revenue fell 25% year over year to CA$55.2 million. Sundial's gross revenue slid 29% year over year to CA$11.7 million.

The Canadian adult-use marijuana market continues to present major headwinds for all companies. The COVID-19 pandemic hurt retail sales. At the same time, provinces reduced their inventory levels.

Both cannabis producers also posted huge losses in their latest quarters. Aurora announced a net loss from continuing operations of CA$165.7 million, compared to a loss of CA$133.5 million in the prior-year period. Sundial's net loss from continuing operations totaled CA$134.4 million in Q1. In the prior-year period, Sundial reported a net loss of CA$37.9 million.

Similar paths

Aurora and Sundial are on strikingly similar paths. Both companies have made significant spending cuts and continue to focus on operational improvement. Aurora plans to slash between CA$60 million and CA$80 million in annual costs over the next 18 months.

Both companies are also focused on investing further in cannabis opportunities. As mentioned earlier, Sundial's positive adjusted EBITDA was due mainly to its investments. Aurora appears to be preparing to invest more as well. CEO Miguel Martin specifically alluded to "opportunistic M&A [mergers and acquisitions], particularly in the U.S." The company plans to file a prospectus for a $300 million stock offering that could be used to fund acquisitions.

Neither pot stock looks attractive, in my view, with their continued losses and revenue declines. However, Sundial appears to at least be moving in the right direction. It's a different story for Aurora.