Cronos Earnings: Overhead Cost Cuts Are Helping, but Growth Concerns Keep Profitability Away

No-moat Cronos reported first-quarter 2023 results, highlighted by slow top line growth and continued losses. Revenue declined 20% to $20 million, made worse by the currency effect of a stronger U.S. dollar. Adjusted EBITDA losses narrowed $2 million to $17 million. Although the company made better progress than we expected on overhead costs, sluggish sales growth and gross margins that have been slower to recover than we expected weigh on our forecast. We’ve cut our fair value estimates to $3 and CAD 4 per share, down from $4 and CAD 5.50, respectively.