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Cannara Biotech
(TSX:LOVE)
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Rating:71Outperform
Price Target:
C$2.00
▲(0.50% Upside)
Action:Reiterated
Date:07/16/26
The score is driven primarily by improving fundamentals (strong growth and profitability turnaround) tempered by recent margin and free-cash-flow volatility. Technicals add support via an established uptrend, while valuation is only moderate given the ~18x P/E and no dividend. The latest earnings call is a net positive due to strong operational momentum and expansion/partnership catalysts, with near-term cash-flow and competition risks noted.
Positive Factors
Revenue and Profitability Growth
Sustained revenue expansion alongside a shift from losses to profitability indicates stronger market adoption and operating scale. This provides a durable base for funding growth, although recent margin trends require continued cost and product-mix discipline.
Negative Factors
Margin Compression
Recent margin deterioration and weaker operating profit show that revenue growth is not translating consistently into earnings. Product mix, cultivation costs and operating expenses could constrain profitability until expanded infrastructure generates better yields and efficiency.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and Profitability Growth
Sustained revenue expansion alongside a shift from losses to profitability indicates stronger market adoption and operating scale. This provides a durable base for funding growth, although recent margin trends require continued cost and product-mix discipline.
Read all positive factors
Cannara Biotech (LOVE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$193.61M
Dividend YieldN/A
Average Volume (3M)39.59K
Price to Earnings (P/E)17.2
Beta (1Y)0.30
Revenue Growth14.66%
EPS Growth-33.72%
CountryCA
Employees452
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.11
Shares Outstanding98,782,150
10 Day Avg. Volume28,949
30 Day Avg. Volume39,594
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)1.63
Price to Sales (P/S)1.55
P/FCF Ratio12.18
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$3.33Price Target Upside67.50% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)0.2
Revenue Forecast (FY)C$138.99M
Cannara Biotech Business Overview & Revenue Model
Company Description
Cannara Biotech Inc., alongside its affiliated entities, specializes in the indoor cultivation, processing, and distribution of cannabis and related products across Canada. The company operates with a dual business model, encompassing both cannabi...
How the Company Makes Money
Cannara Biotech makes money primarily by selling regulated cannabis products into Canada’s legal adult-use market. Its core revenue stream is wholesale (business-to-business) sales of finished cannabis products—such as dried flower and other produ...
Cannara Biotech Earnings Call Summary
Earnings Call Date:Jul 15, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 24, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive operational and financial picture: double-digit revenue growth (16% QoQ), continued profitability (adjusted EBITDA up 11% and 21 consecutive positive quarters), strengthened market penetration (national share gains and record monthly shares in Ontario and Alberta), accelerated capacity expansion and strategic partnerships (Medican acquisition, Blue River technology, CAD 21M Curaleaf agreement). Notable near-term negatives include lower quarterly free cash flow and operating cash flow versus the prior year driven by higher expansion capex, a modest dip in gross margin from product mix, higher receivables and inventory, and competitive pressures in certain categories. On balance, the highlights — consistent profitability, expanding distribution and market share, accelerated capacity rollout, and strategic deals — outweigh the lowlights tied to timing, investment-driven cash flow effects, and category competition.Positive Updates
Revenue Growth
Gross cannabis revenue increased 16% year-over-year to CAD 44.1 million; total net revenue increased 16% to CAD 31.8 million (from CAD 27.3 million) and rose 17% sequentially from Q2.
Negative Updates
Quarterly Cash Flow and Free Cash Flow Reduction
Q3 operating cash flow fell to CAD 5.7 million from CAD 13.9 million in the prior-year quarter; free cash flow declined to CAD 1.3 million from CAD 11.7 million, driven primarily by higher capital expenditures for the Valleyfield expansion and processing center.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue Growth
Gross cannabis revenue increased 16% year-over-year to CAD 44.1 million; total net revenue increased 16% to CAD 31.8 million (from CAD 27.3 million) and rose 17% sequentially from Q2.
Read all positive updates
Company Guidance
Guidance highlighted a demand‑driven, accelerated capacity build: Cannara now has >58,000 kg annualized capacity and expects to activate four additional grow zones by the end of fiscal 2027 to reach ~75,000 kg (with a runway to 100,000 kg), staging three room activations in Q2–Q3 and the final in Q4 after Valleyfield processing upgrades complete in December; new rooms typically take ~5–6 months to meaningfully hit retail. The company also starts the Curaleaf bulk supply agreement on August 1 (up to CAD 21 million over two years, with Curaleaf sponsoring pursuit of EU GMP, a ~1–2 year process once construction is finished), and is funding expansion from internal cash and credit (YTD infrastructure investment >CAD 10.5M, drew CAD 2M of a CAD 10M facility at a 4.83% rate) while maintaining liquidity (CAD 21.8M cash, current assets CAD 97.7M, working capital ~CAD 65.1M) and profitability (Q3 gross cannabis revenue CAD 44.1M, total net revenue CAD 31.8M, adjusted EBITDA CAD 8.5M or 27% margin, net income CAD 4.8M).Cannara Biotech Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
62
Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Nov 2023 | Aug 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 117.76M | 107.32M | 81.75M | 57.26M | 35.84M | 17.02M |
| Gross Profit | 30.97M | 47.22M | 29.79M | 27.23M | 16.74M | 11.86M |
| EBITDA | 14.00M | 28.18M | 15.16M | 15.77M | 7.85M | 4.63M |
| Net Income | 10.86M | 13.08M | 6.44M | 6.95M | 2.31M | -1.53M |
Balance Sheet | ||||||
| Total Assets | 194.49M | 168.65M | 154.72M | 141.52M | 125.62M | 92.02M |
| Cash, Cash Equivalents and Short-Term Investments | 21.81M | 14.36M | 6.62M | 4.27M | 12.11M | 8.16M |
| Total Debt | 37.00M | 41.58M | 48.33M | 45.78M | 48.39M | 20.90M |
| Total Liabilities | 68.64M | 66.43M | 66.77M | 61.78M | 58.88M | 27.91M |
| Stockholders Equity | 125.85M | 102.22M | 87.95M | 79.74M | 66.74M | 64.12M |
Cash Flow | ||||||
| Free Cash Flow | 4.74M | 13.65M | 3.21M | -3.97M | -21.55M | -33.17M |
| Operating Cash Flow | 18.46M | 20.01M | 10.68M | 5.91M | -6.08M | -2.09M |
| Investing Cash Flow | -16.13M | -5.95M | -5.19M | -9.48M | -15.35M | -30.83M |
| Financing Cash Flow | 5.07M | -6.32M | -3.14M | -4.19M | 25.46M | 33.25M |
Cannara Biotech Technical Analysis
Neutral
1.99
Price Trends
1.92
Positive
1.81
Positive
1.81
Positive
Market Momentum
0.02
Positive
48.92
Neutral
27.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LOVE, the sentiment is Neutral. The current price of 1.99 is above the 20-day moving average (MA) of 1.98, above the 50-day MA of 1.92, and above the 200-day MA of 1.81, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 48.92 is Neutral, neither overbought nor oversold. The STOCH value of 27.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:LOVE.
Cannara Biotech Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$338.61M | 9.73 | 18.12% | ― | 18.79% | 10.74% | |
71 Outperform | C$193.61M | 17.21 | 9.45% | ― | 14.66% | -33.72% | |
65 Neutral | C$154.96M | -27.58 | -12.66% | ― | 34.29% | -307.69% | |
60 Neutral | C$215.74M | 2.29 | 21.99% | ― | 38.14% | 2030.00% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
38 Underperform | C$161.76M | -1.68 | 53.44% | ― | 4.96% | -12.20% |
* Healthcare Sector Average
TSE:LOVE
Cannara Biotech
1.96
0.23
13.01%
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0.78
-0.09
-10.34%
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Organigram Global
1.47
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-35.81%
TSE:XLY
Auxly Cannabis Group
3.24
1.28
65.31%
TSE:GRIN
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0.58
-0.08
-12.12%
Cannara Biotech Corporate Events
Business Operations and StrategyExecutive/Board ChangesDividends
Source Rock Royalties Declares Monthly Dividend and Grants RSUs to Leadership
Positive
Jul 16, 2026
Source Rock Royalties has declared a monthly cash dividend of $0.0065 per common share, payable on August 14, 2026, to shareholders of record as of July 31, 2026, and designated it as an eligible dividend for Canadian tax purposes. The move unders...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.