|Bid||19.12 x 1200|
|Ask||19.30 x 1300|
|Day's Range||17.48 - 18.78|
|52 Week Range||13.81 - 52.74|
|Beta (5Y Monthly)||3.90|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
A recent study shows that pot use by those over 65 nearly doubled fromn 2015 to 2018, while the share of seniors who acknowledged cannibis use soared by 75%. The danger: an increase in both alcohol and pot use.
Despite better than expected quarterly results, Canopy Growth (CGC) hasn’t seen the stock sustain the rally. The coronavirus fears have overshadowed any positive from the quarterly report. While new CEO David Kline promised some restructuring, the company still hasn’t made any official moves to align cannabis production with demand or significant plans to reduce costs. Investors should expect another big move from the company.Inventory ProblemsFor the December quarter, Canopy Growth surprised the market by reporting C$123.8 million in net revenue. The market expected far lower revenues after the big provisions and pricing adjustments of FQ2 and the warnings from competitors.In reality, gross revenues were mostly up due to a surge in other revenues from strategic acquisitions. Cannabis gross revenues were only up C$7.5 million sequentially. The major revenue gains came from the growth in Storz & Bickel vapes and This Works.For this reason, Canopy Growth has a major cannabis inventory issue. The company ended December with C$622.6 million in inventory, up from only C$262.1 million when the fiscal year started.Not only is the inventory issue a problem, but the large cannabis company continues to produce far in excess of needs. MKM analyst Bill Kirk estimates Canopy Growth has produced 115,000 kg more than the company has sold. He even estimates the company has enough inventory for 2.5 years of sales.For December, the company harvested 29,920 kg while only selling 13,237 kg. The amounts improved dramatically from the prior quarter where production was 40,570 kg while sales were only 10,913 kg. Regardless, Canopy Growth was still producing double the sales level last quarter with no signs of material improvements in the Canadian market.Cost Cutting NextWhile Canopy Growth needs to work on further reducing cultivation levels while inventory levels are far too high, the company needs to find additional ways to reduce operating expenses. Even the improved results in FQ3 due to 140 new cannabis retail stores in the Canadian market, the large cannabis company still produced an unsustainable C$91.7 million adjusted EBITDA loss.For FQ3, Canopy Growth was able to reduce operating expenses by C$10.0 million sequentially to C$150.3 million. But the amount is still nearly 4x the new spending targets of Aurora Cannabis. The launch of Cannabis 2.0 products in Canada and CBD in the U.S. will make these costs difficult to cut substantially.CFO Mike Lee promised the company will take further steps to reduce costs and right-size the business, but the company hasn’t made a move yet. Canopy Growth still has the cash balance of C$2.3 billion, but the cannabis giant can’t continue burning C$400 million per quarter and still have investors invest in the company based on a sizable balance sheet safety net.Consensus VerdictWall Street has mixed reviews on Canopy Growth. Of 13 analyst ratings tracked by TipRanks, 6 recommend Buy and 7 suggest Hold. The average price target is $21.97, which represents a 20% upside from current levels. (See Canopy stock analysis at TipRanks)TakeawayThe key investor takeaway is that Canopy Growth still has more hurdles with the stock valuation. Even with the coronavirus market dip, the stock is expensive with a valuation of $7.5 billion while revenue estimates for FY21 ending March are still only up at $550 million after the strong December quarter revenues.Investors have no valid reason to pay nearly 14x forward sales for a stock still needing to restructure the business. Once the new CEO dramatically cuts the operating expense base and reduces cultivation levels more in line with weak market demand, the stock will become a more appealing long term play.To find better ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Almost as soon as marijuana got the green light in Canada, investors were looking toward “ cannabis 2.0 ” — edibles, concentrates, topicals, beverages. Bank of America analysts Christopher Carey and Lisa ...
The increasing usage should spur clinical research on older consumers, researchers at New York University say, because “older adults are especially vulnerable to potential adverse effects from cannabis.”
Cowen downgraded Aurora Cannabis Inc. along with Tilray Inc. and Sundial Growers Inc. on Monday with analysts becoming increasingly cautious on the outlook for Canadian licensed producers.
Cannabis stocks fell as Cowen downgraded Aurora Cannabis and Tilray but kept Canopy Growth as its only "outperform" pot stock.
Cowen analyst Vivien Azer downgraded Tilray and Aurora Cannabis to Market Perform from Outperform. She also downgraded Sundial Growers to Market Perform.
As the Canadian cannabis market continues to fail to meet sales projections, the licensed producers (LPs) with the best balance sheets are poised to lead a market rebound. With both Aurora Cannabis and Tilray implementing restructurings, the industry could see a void in certain markets providing opportunities for companies with the ability to fund growth initiatives.Based on the Aurora restructuring, the company is exiting several international markets along with shifting a focus to a value brand. Along with cutting cultivation goals from close to 700,000 kg to only 150,000 kg, the company plans to strip out over C$60 million in quarterly operating expenses. The disruption from removing so many expenses should leave some voids in the market allowing opportunistic moves by companies with the ability to continue investing.In a smaller manner, Tilray is cutting 10% of their workforce. The company hasn’t detailed their plans regarding exiting any businesses, but a business the size of Tilray cutting 140 employees will leave an inevitable void. The move will allow a better funded business to capture more market share as the job functions of the exiting employees aren’t fully absorbed within the smaller workforce.We’ve delved into these three Canadian companies poised to lead a market rebound as other companies restructure and focus on survival:Aphria (APHA)Aphria remains the best value in the sector combined with having the catalysts of their new facility ramping up production. The stock is down to only $4.20 now offering only a $1.12 billion market valuation.The company recently reported FQ2 revenues of C$120.6 million along with positive EBITDA. The cannabis business only accounts for C$33.7 million in quarterly revenues, but the business is poised to jump due to the Aphria Diamond facility increasing production capacity to 255,000 kg annually from a previous level of only 115,000 kg.Aphria forecast revenues reaching C$600 million in FY20 leading to a near C$50 million boost per quarter for the 2H of the year. The big forecast includes adjusted EBITDA in the C$40 million range.The Canadian cannabis company recently raised C$80 million secured by the new cultivation facility pushing the cash balance to nearly C$500 million at the end of November. In January, Aphria raised another C$100 million from an institutional investor to provide additional capital for international expansion and working capital.Due to the additional cultivation capacity, Aphria has a major catalyst to boost the company from existing levels. The stock has the better potential for substantial gains on a turnaround due to their leading financial position and low valuation.The word on the Street rings largely bullish on this cannabis player, with TipRanks analytics demonstrating APHA as a Moderate Buy. Out of 6 analysts tracked in the last 3 months, 4 are bullish on Aphria stock, while 2 remain sidelined. With a return potential of over 60%, the stock's consensus price target stands at $6.83. (See Aphria stock analysis at TipRanks)Cronos Group (CRON)Cronos is the one company with the cash balance that hasn’t aggressively spent the balance as of yet. The cannabis company ended the September quarter with a cash balance of $2.0 billion from the investment by Altria Group all the way back in 2018.Analysts only forecast 2020 revenues reaching $118 million due to the lack of investments in cultivation facilities so far with the focus more on building global operations, CBD products and Cannabis 2.0 products. The company has an asset-light strategy with a focus on buying cannabis derived products from third parties to be branded under Cronos brands. The biggest issue for the stock is the strategy has been light on products.Investors should see Cronos as the most likely acquirer of beaten down assets, especially any strong cannabis brands that don’t have the capital to remain in business or expand. In this manner, the company is likely to lead the market turnaround via consolidation.A few timely deals to remove a couple of competitors from the Canadian cannabis market could do wonders for removing capacity and pricing pressure from the sector. Cronos can easily spend $500 million to $1 billion without damaging their capital position and ability to invest in growing the existing businesses while boosting their revenue streams.Based on the above factors, Wall Street also has high hopes for CRON. As 3 Buy ratings were assigned in the last three months compared to no Holds or Sells, the consensus is a ‘Strong Buy.’ To top it all off, its $10.29 average price target puts the potential twelve-month gain at a whopping 43%. (See Cronos stock analysis at TipRanks)Canopy Growth (CGC)The largest valued cannabis stock remains Canopy Growth. The company has the cash and backing from Constellation Brands to lead in any sector rebound.For the just reported quarter, Canopy generated December revenues of C$123.8 million for 49% growth over last year due to European acquisitions in the CBD space. The company is now double the size of Aurora and, prior to any reorganization, is spending C$150.3 million on operating expenses or at least three times the reduced base of Aurora.New CEO David Klein discussed some general plans to reorganize the business, but investors shouldn’t expect the scale of the others. Clearly, Canopy needs to cut the C$91.7 million quarterly EBITDA loss in order for the market to have confidence in their sector leadership in the future.The company can reduce the EBITDA loss via revenue growth and higher margins, but some additional constraints on operating expenses would go a long way to reduce any fears of out of control losses. Canopy has a C$2.3 billion cash balance remaining from the Constellation Brands investment allowing for continued investment in international markets and Cannabis 2.0 products. The large cash balance allows the new CEO to continue investing while shutting some smaller segments not generating strong margins and burning cash.The biggest issue for the stock is the $8 billion market valuation. The stock trades at 14x FY21 revenue estimates of ~$550 million. The stock will rebound on any cannabis turnaround, but investors shouldn’t expect massive gains due to the large cap status of Canopy.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclosure: No position.
Martha Stewart is nothing short of a legend if you ask housewives and homemakers across America. The television personality, who rose to fame in the 80s through her cookbooks, homemaking magazines and cooking shows, established herself as an emblem of American culture throughout the world. Some may inquire why America’s favorite homemaker is the new face of Canopy Growth’s CBD product line.
Tim Seymour, CIO of Seymour Asset Management and co-host of CNBC's "Fast Money," joined Benzinga’s PreMarket Prep on Thursday , ahead of his appearance at the Cannabis Capital Conference Feb. ...
Canopy Growth Corp.’s U.S.-listed shares rose Monday, extending gains made Friday after the Canadian cannabis company surprised investors with better-than-expected earnings.
Are marijuana stocks on U.S. exchanges a good buy now? The marijuana industry gets a lot of hype, but look past the smoke and analyze pot stocks on their fundamentals and technicals.
Canopy Growth stock has been praised by many analysts. Here’s what chart analysis shows about buying this marijuana stock right now.
Exciting things are always in the works at Direct CBD Online. What better way to help customers put in work wherever their fitness journey takes them than with an exclusive partnership with the 1 choice of North American pro athletes and sports nutritionists worldwide — BioSteel.
A strong week for cannabis closed with surprising quarterly results from Canopy Growth Corporation (NYSE: CGC ) (TSX: WEED) Friday, with fiscal third-quarter net revenue of CA$123.8 million ($93.5 million), ...
The largest Canadian marijuana companies have less than a year’s worth of cash left on average, according to a new study.
Canopy Growth stock roared higher Friday and sparked a broad rally among cannabis stocks, after a better-than-expected earnings report bolstered sentiment on the beaten-down sector.
Canopy Growth Corp. reported earnings early Friday that gave investors a few reasons to cheer: In short, it wasn’t a total disaster.
Canopy Growth's new CEO David Klein delivered first quarter results that topped expectations across the board as shares popped 15%.