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Canopy Growth Corp CGC

Morningstar Rating
$0.56 +0.02 (3.57%)
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Company Report

Canopy Growth Earnings: Losses Narrow, but Cash Burn and Dilution to Existing Equity Will Continue

We don’t expect to make significant changes to our $0.80/CAD 0.90 fair value estimate for no-moat Canopy Growth after the release of fiscal 2024 second-quarter results. Even though the shares trade well below our valuation, we reiterate our Extreme Morningstar Uncertainty Rating. In particular, we think existing equityholders are likely to see significant dilution as cash burn continues and debt matures. During the quarter, the share count grew another 30% to more than 716 million. We think the dilution threat remains and model that shares could more than double as breakeven free cash flow remains years away.

Price vs Fair Value

CGC is trading at a 30% discount.
Price
$0.56
Fair Value
$2.50
Uncertainty
Extreme
1-Star Price
$9.50
5-Star Price
$1.50
Economic Moat
Ddvg
Capital Allocation
Vctks

Bulls Say, Bears Say

Bulls

Canopy Growth’s plans to create Canopy USA to strengthen its competitive position before U.S. federal legalization.

Bears

While Canopy waits for U.S. federal legalization to enter the THC market there, U.S. multistate operators continue to grow bigger and become more competitive.

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News

Trading Information

Previous Close Price
$0.54
Day Range
$0.530.57
52-Week Range
$0.354.77
Bid/Ask
$0.56 / $0.57
Market Cap
$463.96 Mil
Volume/Avg
8,458 / 52.3 Mil

Key Statistics

Price/Earnings (Normalized)
Price/Sales
1.33
Dividend Yield
Dividend Yield (Forward)
Total Yield

Company Profile

Canopy Growth, headquartered in Smiths Falls, Canada, cultivates and sells medicinal and recreational cannabis, and hemp, through a portfolio of brands that include Doja, 7ACRES, Tweed, and Deep Space. Its non-THC products include sports drink BioSteel, skincare products under This Works, Martha Stewart CBD, and Storz & Bickel vaporizers. Canopy growth is attempting to merge its U.S. assets into a separately operated holding company, Canopy USA, which will not be consolidated into the Canadian company's financials.
Sector
Healthcare
Industry
Drug Manufacturers - Specialty & Generic
Stock Style Box
Small Core
Total Number of Employees
1,621

Competitors

Valuation

Metric
CGC
CURLF
ACB
Price/Earnings (Normalized)
Price/Book Value
0.842.400.52
Price/Sales
1.331.930.81
Price/Cash Flow
Price/Earnings
CGC
CURLF
ACB

Financial Strength

Metric
CGC
CURLF
ACB
Quick Ratio
1.730.291.43
Current Ratio
2.520.873.29
Interest Coverage
−8.17−2.47
Quick Ratio
CGC
CURLF
ACB

Profitability

Metric
CGC
CURLF
ACB
Return on Assets (Normalized)
−1.72%−6.81%
Return on Equity (Normalized)
−4.05%−17.81%
Return on Invested Capital (Normalized)
2.49%−6.76%
Return on Assets
CGC
CURLF
ACB

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