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Cronos Group 1Q Profit And Revenue Miss Estimates; Shares Up 4%

Shares of Cronos Group (CRON) rose by more than 4% on Friday morning despite the cannabis company reporting disappointing first-quarter results.

Cronos Group’s net revenue for 1Q 2021 came in at $12.6 million, 50% higher than the revenue of $6.3 million reported in 1Q 2020. Continued growth in the Canadian adult-use cannabis market and sales in the Israeli medical cannabis market were among the company’s revenue growth drivers.

Meanwhile, the global cannabinoid company reported a net loss of $161.6 million ($0.44 per share) in 1Q 2021, compared to a profit of $75.7 million ($0.20 per share) in 1Q 2020.

The Zacks Consensus Estimate was for a loss of $0.09 per share and revenue of $16.98 million.

President and CEO Kurt Schmidt said, “This quarter for Cronos Group would not have been possible without the tenacious and innovative efforts put forward by every Cronos employee across our organization. In the first quarter of 2021, our results in Canada were impacted by market dynamics due to the COVID-19 pandemic and ensuing stay-at-home orders and various other restrictions. Despite this, we continued to push forward our innovation pipeline and execute on our strategy, which was a true testament to the strength of our team.”

In the coming weeks, Cronos Group intends to launch Spinach edibles, a new product category for the Canadian adult-use market. (See Cronos Group stock analysis on TipRanks)

About two weeks ago, Raymond James analyst Rahul Sarugaser reiterated a Buy rating on CRON with an $11.00 price target (C$13.38), for a 40% upside potential.

Sarugaser stated, “CRON is one of the companies we believe will change the cannabinoid product landscape through its longstanding commitment to innovation—evidenced by its investment in biosynthesis and its appointment of CPG product innovation legends like Todd Abraham to its executive team —paired with its (and Altria’s) significant resources.”

Overall, CRON scores a Hold consensus rating among analysts based on 1 Buy, 5 Holds, and 2 Sells. The average analyst price target of C$11.40 implies a 19% upside potential to current levels.

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