Canopy Growth (WEED) AI Stock Analysis

• Market Cap: $320.53M
• Dividend Yield: N/A
• Average Volume (3M): 1.64M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.58
• Revenue Growth: -16.27%
• EPS Growth: N/A
• Country: CA
• Employees: 1,029
• Sector: Healthcare
• Sector Strength: 50
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -1.11
• Shares Outstanding: 154,829,640
• 10 Day Avg. Volume: 2,395,777
• 30 Day Avg. Volume: 1,644,842
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.33
• Price Target Upside: 193.09% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

Canopy Growth's overall score reflects significant financial challenges, including declining revenue and profitability issues. While technical indicators show some positive signals, the valuation remains unattractive. Improvements in EBITDA and cash flow are positive, yet overall revenue decline and market competition pose risks. Recent strategic initiatives, including debt reduction and market expansions, offer potential for improvement but are currently insufficient to offset existing financial weaknesses.

Positive Factors

Profitability Efforts

The company demonstrated commitment to profitability with a 35% gross margin and significant cost-cutting measures, including reductions in cost of goods sold and selling, general, and administrative costs.

Sales Performance

Storz & Bickel sales showed strong growth, particularly in Germany and the US, contributing positively to Canopy's sales figures.

Negative Factors

Market Challenges

Canopy is facing issues like inconsistent gross margins, high operational costs, and a challenging market environment in Canada.

Regulatory Uncertainty

The uncertainty of US federal reform timeline affects institutional investor interest and industry profitability.

Stock Price Impact

Canopy's stock price has plunged significantly due to its two recent ATM programs to raise cash and other unfavorable factors.

Canopy Growth Business Overview & Revenue Model

Company Description

Canopy Growth Corporation, together with its subsidiaries, engages in the production, distribution, and sale of cannabis and hemp-based products for recreational and medical purposes primarily in Canada, the United States, and Germany. It operates through two segments, Global Cannabis and Other Consumer Products. The company's products include dried cannabis flower, extracts and concentrates, beverages, gummies, and vapes. It offers its products under the Tweed, 7ACRES, 7ACRES Craft Collective, DOJA, Ace Valley, Quatreau, Deep Space, First + Free, Surity Pro, Spectrum Therapeutics, Vert, Tokyo Smoke, Twd, Martha Stewart CBD, DNA Genetics, BioSteel, Storz & Bickel, This Works, HiWay, Simple Stash, Whisl, and Truverra brands. The company was formerly known as Tweed Marijuana Inc. and changed its name to Canopy Growth Corporation in September 2015. Canopy Growth Corporation was incorporated in 2009 and is headquartered in Smiths Falls, Canada.

How the Company Makes Money

Canopy Growth makes money primarily through the cultivation, processing, and sale of cannabis and cannabis-derived products. Its revenue streams include the sale of recreational cannabis products in Canada, medical cannabis products globally, and CBD products in various markets. The company also generates income through its strategic partnerships and investments, such as with Constellation Brands, which provides expertise in brand building and distribution. Additionally, Canopy has pursued acquisitions and developed a portfolio of brands to expand its market reach and product offerings, thus contributing to its earnings.

Canopy Growth Financial Statement Overview

Summary

Canopy Growth faces significant financial challenges with declining revenue, negative profitability margins, and cash flow inefficiencies. Despite some improvements in gross profit margin, the company's balance sheet stability is weakened by declining equity and poor returns on equity. The cash flow position remains weak, highlighting the need for strategic improvements to achieve sustainable financial health.

Income Statement

Canopy Growth has experienced a significant decline in revenue from 2022 to TTM (Trailing-Twelve-Months), with a revenue growth rate of -46.8%. The gross profit margin for TTM is 27.9%, which shows improvement from previous periods. However, net profit margin remains deeply negative at -169.7%, indicating ongoing profitability challenges. The company also reports negative EBIT and EBITDA margins, reflecting operational inefficiencies.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.83 in TTM, indicating a balanced approach to financing with equity. However, a declining equity ratio of 50.8% in TTM suggests a reduction in asset leverage. Return on equity is significantly negative at -79.4%, pointing to poor returns on shareholder investments.

Cash Flow

Canopy Growth's cash flow statement reveals a negative free cash flow with no growth, as well as an operating cash flow to net income ratio of 0.33 in TTM, reflecting inefficiencies in converting income into cash. The company's free cash flow to net income ratio is negative, indicating operational cash flow challenges.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
297.15M	402.90M	520.33M	546.65M	398.77M
	Gross Profit
79.90M	-104.14M	-193.05M	66.96M	-31.68M
	EBIT
-228.71M	1.67B	-1.08B	44.30M	-1.67B
	EBITDA
-312.83M	-2.88B	-121.15M	-1.50B	-1.31B
	Net Income Common Stockholders
-657.27M	-3.31B	-320.49M	-1.67B	-1.39B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
205.83M	782.60M	1.37B	2.30B	1.98B
	Total Assets
1.30B	2.44B	5.62B	6.82B	6.86B
	Total Debt
668.00M	1.31B	1.50B	1.58B	625.82M
	Net Debt
497.70M	629.87M	724.99M	428.31M	-677.36M
	Total Liabilities
799.82M	1.68B	1.98B	3.20B	1.68B
	Stockholders Equity
500.37M	758.43M	3.59B	3.48B	4.89B
Cash Flow		Free Cash Flow
-285.95M	-568.10M	-593.92M	-639.87M	-1.49B
	Operating Cash Flow
-281.95M	-557.55M	-545.81M	-465.73M	-772.63M
	Investing Cash Flow
241.59M	433.38M	230.82M	-884.11M	-347.65M
	Financing Cash Flow
-465.06M	-19.69M	-45.53M	1.26B	-57.16M

Canopy Growth Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.82
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WEED, the sentiment is Positive. The current price of 1.82 is above the 20-day moving average (MA) of 1.70, above the 50-day MA of 1.63, and below the 200-day MA of 4.67, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 55.72 is Neutral, neither overbought nor oversold. The STOCH value of 23.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WEED.

Canopy Growth Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	52 Neutral	$5.17B	3.59	-42.19%	2.82%	15.05%	-0.04%
WEED	47 Neutral	$320.53M	―	-84.50%	―	-16.27%	―

Canopy Growth Corporate Events

Canopy Growth Launches Spectrum Reserve: A New Premium Medical Cannabis Brand

Canopy Growth has launched Spectrum Reserve, a new premium medical cannabis brand in Canada, designed to cater to the evolving needs of medical cannabis patients. The brand will regularly introduce new strains based on patient feedback, focusing on potency and terpene levels to ensure premium quality. This initiative reinforces Canopy Growth’s leadership in the medical cannabis sector by combining advanced cultivation techniques with a commitment to delivering high-quality products, potentially strengthening its market position and enhancing its offerings for stakeholders.

Canopy Growth Reduces Debt with Early Loan Prepayment

Canopy Growth has announced an optional early prepayment of US$100 million on its senior secured term loan, resulting in annual interest savings of approximately US$13 million and extending the loan’s maturity to September 2027. This strategic move strengthens the company’s balance sheet by reducing debt and lowering interest costs, positioning Canopy Growth for sustainable growth in the evolving global cannabis market.

Canopy Growth Launches US$200 Million Equity Program to Strengthen Financial Position

Canopy Growth Corporation has launched a new at-the-market equity program allowing the issuance and sale of up to US$200 million in common shares. The proceeds are intended to bolster the company’s financial position by reducing debt, enhancing cash reserves, and supporting strategic mergers and acquisitions. This move is expected to strengthen Canopy Growth’s market positioning and operational capabilities.

Canopy Growth Expands Tweed Brand into German Medical Cannabis Market

Canopy Growth has launched its Tweed brand in the German medical cannabis market, introducing four new strains through a partnership with Portuguese cultivator Gro-Vida. This expansion, which includes the earlier introduction of the Glitter Bomb strain via Cansativa, aims to meet the increasing demand for high-THC genetics among German medical patients, enhancing Canopy Growth’s presence in the European market.

Canopy Growth Expands Beverage Lineup with New Flavors

Canopy Growth has expanded its Deep Space Propulsion beverage lineup with the launch of two new cannabis-infused flavors: Rocket Root Beer and Charged Cream Soda. These beverages, developed in Canada, feature 10mg of THC and 10mg of CBG per can, offering consumers a unique taste experience. The expansion strengthens Canopy Growth’s leadership in the cannabis beverage category, offering a premium range of drinks now available in select regions across Canada.

Canopy Growth Shows Strong Product Performance and Financial Improvements in Q3 FY2025

Canopy Growth reported its financial results for the third quarter of fiscal year 2025, highlighting a strong performance in its medical cannabis segment and an increase in international market revenues. The company’s new product, Claybourne infused pre-rolls, quickly achieved notable market share in Canada. Despite a 5% decrease in net revenue compared to the previous year, excluding divested businesses, revenue actually grew by 8%. The company’s financial position improved with a reduction in total debt and operating losses, driven by cost savings and strategic actions.