Canopy Growth (NASDAQ:CGC) Issues Earnings Results

Canopy Growth (NASDAQ:CGC) released its earnings results on Friday. The company reported ($0.02) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.04) by $0.02, Zacks reports. Canopy Growth had a negative return on equity of 26.95% and a negative net margin of 75.27%.

Here are the key takeaways from Canopy Growth’s conference call:

• Revenue increased 13% year over year to CAD 81.2 million, with growth across all business lines, including Canadian medical cannabis (+22%), Canadian adult use (+10%), international cannabis (+10%), and Storz & Bickel (+6%).
• Adjusted gross margin expanded to 31% from 25% a year earlier, while the adjusted EBITDA loss improved 59% to CAD 3.2 million; management remains on track to deliver positive adjusted EBITDA during fiscal 2027.
• Management expects cultivation upgrades, MTL Cannabis integration, supply-chain optimization, and modest facility investments to improve yields, product quality, costs, and margins; it is targeting adjusted gross margin in the mid-30% range in the near term.
• Europe remains a major growth catalyst, with Canopy now a top-three supplier in Poland and U.K. flower shipments expected to begin imminently; additional EU GMP certification for Smiths Falls is expected during fiscal 2027.
• Canadian medical growth continues despite a 29% reduction in Veterans Affairs reimbursement rates, but the change is reducing order values and pressuring margins; first-quarter operating cash use was CAD 25 million, although management expects working capital and one-time costs to normalize.

Canopy Growth Stock Performance

Shares of NASDAQ:CGC traded up $0.04 on Friday, hitting $0.97. 5,168,474 shares of the company were exchanged, compared to its average volume of 2,117,951. The company’s 50 day moving average price is $0.96 and its two-hundred day moving average price is $1.04. Canopy Growth has a one year low of $0.84 and a one year high of $2.38. The company has a debt-to-equity ratio of 0.31, a quick ratio of 2.64 and a current ratio of 3.34. The firm has a market capitalization of $435.01 million, a price-to-earnings ratio of -1.64 and a beta of 0.81.

Analyst Upgrades and Downgrades

Separately, Weiss Ratings raised Canopy Growth from a “sell (e+)” rating to a “sell (d-)” rating in a research report on Wednesday, July 29th. Two equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company has a consensus rating of “Hold”.

Insider Activity

In related news, insider Christelle Gedeon sold 58,994 shares of the stock in a transaction dated Wednesday, June 17th. The shares were sold at an average price of $0.97, for a total value of $57,224.18. Following the completion of the sale, the insider owned 705,506 shares in the company, valued at approximately $684,340.82. This trade represents a 7.72% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Luc Mongeau sold 135,231 shares of Canopy Growth stock in a transaction dated Wednesday, June 17th. The stock was sold at an average price of $0.97, for a total value of $131,174.07. Following the sale, the chief executive officer directly owned 1,723,913 shares in the company, valued at approximately $1,672,195.61. This trade represents a 7.27% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 224,958 shares of company stock valued at $217,137. 0.16% of the stock is owned by corporate insiders.

Institutional Trading of Canopy Growth

Several institutional investors have recently modified their holdings of the company. Jones Financial Companies Lllp increased its position in shares of Canopy Growth by 10,308.3% during the first quarter. Jones Financial Companies Lllp now owns 969,533 shares of the company’s stock valued at $882,000 after purchasing an additional 960,218 shares during the period. Goldman Sachs Group Inc. lifted its position in Canopy Growth by 64.6% in the first quarter. Goldman Sachs Group Inc. now owns 330,278 shares of the company’s stock worth $301,000 after purchasing an additional 129,620 shares during the period. Murchinson Ltd. bought a new position in Canopy Growth in the second quarter worth $183,000. Boothbay Fund Management LLC acquired a new stake in Canopy Growth during the second quarter worth $30,000. Finally, Tidal Investments LLC boosted its stake in Canopy Growth by 31.5% during the second quarter. Tidal Investments LLC now owns 5,033,793 shares of the company’s stock worth $6,141,000 after buying an additional 1,204,530 shares in the last quarter. Institutional investors and hedge funds own 3.33% of the company’s stock.

More Canopy Growth News

Here are the key news stories impacting Canopy Growth this week:

• Positive Sentiment: Net revenue increased 13% year over year to C$81.2 million, exceeding the approximately C$58.9 million analyst consensus. Growth came from all major businesses: Canada medical cannabis rose 22%, Canada adult-use cannabis 10%, international cannabis 10% and Storz & Bickel 6%. Canopy Growth Reports First Quarter Fiscal Year 2027 Financial Results
• Positive Sentiment: Adjusted gross margin improved to 31% from 25% a year earlier, while the adjusted EBITDA loss narrowed 59% year over year. The margin improvement supports the company’s turnaround strategy and helped drive the stock higher. Canopy Growth reports fiscal first quarter revenue growth, improved margins
• Positive Sentiment: Canopy Growth reported a quarterly loss of C$0.02 per share, better than the expected C$0.04 loss and substantially improved from a C$0.14 loss in the prior-year quarter. This represented a 50% earnings surprise. Canopy Growth Corporation Reports Q1 Loss, Tops Revenue Estimates
• Neutral Sentiment: The company remains unprofitable, with a negative net margin and negative return on equity. Investors will likely focus on whether revenue momentum and cost controls can eventually produce positive EBITDA and sustainable earnings.
• Negative Sentiment: A proposed partial settlement in a securities class-action lawsuit would resolve claims against former auditor KPMG if approved, but the case would continue against Canopy Growth and other defendants, leaving a potential legal overhang. Certification and Hearing to Approve Proposed Partial Settlement

Canopy Growth Company Profile

Canopy Growth Corporation is a leading Canadian cannabis company engaged in the production, distribution and sale of both medical and recreational cannabis products. Headquartered in Smiths Falls, Ontario, the company cultivates a diversified portfolio of offerings that includes dried flower, pre-rolled joints, oils, softgel capsules and edibles. Canopy Growth also markets derivative products such as beverages and wellness formulations under a range of brands, aiming to serve both patient and adult-use markets.

The company operates through multiple subsidiaries, including Tweed Inc, Spectrum Therapeutics and Tokyo Smoke, each targeting distinct consumer segments.