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Cronos (CRON) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research

Cronos Group CRON is scheduled to report third-quarter results on Nov 12.

The company beat earnings expectations by 50% in the last reported quarter. In the last four quarters, the company surpassed earnings estimates twice and missed on the other two occasions, with average positive surprise of 437.50%.
Let us see what is in store for the third quarter.

Cronos Group Inc. Price, Consensus and EPS Surprise

 

Cronos Group Inc. Price, Consensus and EPS Surprise

Cronos Group Inc. price-consensus-eps-surprise-chart | Cronos Group Inc. Quote

Factors in Focus

Cronos is a globally diversified and vertically integrated cannabis company.
Revenues jumped 202% year over year in the second quarter, driven by the launch of the adult-use market in Canada. Sequentially, revenues were up on increased sales in CBD oil, which carries no excise tax reduction, and higher sales of dry flower. A similar trend most likely continued in the third quarter.

However, increased costs most likely hurt margins in the third quarter.

Moreover, investors will focus on Cronos’ pipeline progress and crucial updates, when it reports third-quarter results.  In September 2019, the company closed its previously announced acquisition of four Redwood Holding Group, LLC operating subsidiaries. The transaction provides Cronos with a leading U.S. hemp-based products platform, including hemp-derived CBD-infused skin care and other consumer products that are sold online and through retail and hospitality partner channels in the United States, under the brand, Lord Jones.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Cronos this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Cronos is -50.00%.

Zacks Rank: The company currently carries a Zacks Rank #2.

Stocks to Consider

Here are some other stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Amicus Therapeutics FOLD has an Earnings ESP of +3.98% and a Zacks Rank #2. The company is scheduled to release third-quarter results on Nov 11. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eyenovia EYEN has an Earnings ESP of +10.51% and a Zacks Rank #2. The company is scheduled to release third-quarter results on Nov 13.

Canopy Growth Corporation CGC has an Earnings ESP of +11.85% and a Zacks Rank #3. It will release its financial results for the second quarter of fiscal 2020 on Nov 14.

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