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Auxly Cannabis Group
(TSX:XLY)
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Rating:79Outperform
Price Target:
C$3.50
▲(11.46% Upside)
Action:Reiterated
Date:08/24/26
The score is driven primarily by improved financial performance (profitability, deleveraging, and strong free cash flow) and supportive technical momentum (price above major moving averages with positive MACD). The earnings call reinforces the outlook with strong recent operating results and reiterated guidance, while valuation is helped by a modest P/E but lacks dividend support. Main constraints are recent margin compression versus 2025 and execution/funding risk tied to the multi-year capital expansion.
Positive Factors
Revenue and EBITDA Growth
Double-digit revenue growth alongside faster EBITDA expansion indicates improving scale and operating leverage. Sustained 31% EBITDA margins for five consecutive quarters support the durability of the company’s branded-product model.
Negative Factors
TTM Margin Compression
Despite remaining profitable, lower trailing margins and slower revenue growth raise questions about the consistency of recent operating gains. Persistent pricing pressure, higher costs or unfavorable product mix could limit earnings growth over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and EBITDA Growth
Double-digit revenue growth alongside faster EBITDA expansion indicates improving scale and operating leverage. Sustained 31% EBITDA margins for five consecutive quarters support the durability of the company’s branded-product model.
Read all positive factors
Auxly Cannabis Group (XLY) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$327.26M
Dividend YieldN/A
Average Volume (3M)116.72K
Price to Earnings (P/E)9.6
Beta (1Y)0.74
Revenue Growth18.79%
EPS Growth10.74%
CountryCA
Employees446
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.33
Shares Outstanding103,235,435
10 Day Avg. Volume97,054
30 Day Avg. Volume116,723
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)1.09
Price to Sales (P/S)1.27
P/FCF Ratio8.25
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$4.00Price Target Upside27.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.14
Revenue Forecast (FY)C$164.50M
Auxly Cannabis Group Business Overview & Revenue Model
Company Description
Auxly Cannabis Group Inc. operates as a Canadian consumer packaged goods (CPG) firm focused on the cannabis market. Its primary activities include the development, manufacturing, and distribution of cannabis products, targeting both recreational a...
How the Company Makes Money
Auxly primarily makes money by selling cannabis products into the Canadian legal market. Its main revenue stream is the wholesale sale of branded finished goods (e.g., dried flower, pre-rolls, vape products, extracts, and edibles) that are distrib...
Auxly Cannabis Group Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 16, 2026
Earnings Call Sentiment Positive
The call presents multiple strong operational and financial positives: double-digit revenue growth (+18% YoY), improving gross margins (55%, +3pp), record adjusted EBITDA (+24% YoY) and very strong cash conversion (94%). Product innovation and distribution momentum (Liquid Imagination, Back Forty, Galactic Jack) and an articulated $30M 3-year capital plan to raise yields are constructive. Offsetting items are accounting-driven net income volatility from noncash fair-value adjustments, higher SG&A to support growth, modest net debt (~$6M), and execution/funding risk related to the multi-year capacity expansion and cautious stance on international expansion. Overall, the highlights materially outweigh the lowlights.Positive Updates
Record Quarterly Financial Performance
Net revenue of $45.8M, up 18% year-over-year; adjusted EBITDA of $14.3M, up 24% year-over-year, representing an EBITDA margin of 31% (sustained for five consecutive quarters).
Negative Updates
Reported Net Income Volatility Due to Noncash Adjustments
Reported net income was $7.7M (essentially flat to $8.3M in Q2 2025) and is impacted by noncash fair-value adjustments on biological assets and inventory. Excluding these mark-to-market swings, underlying net income would have improved by ~$2.2M for the quarter.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Financial Performance
Net revenue of $45.8M, up 18% year-over-year; adjusted EBITDA of $14.3M, up 24% year-over-year, representing an EBITDA margin of 31% (sustained for five consecutive quarters).
Read all positive updates
Company Guidance
Auxly reiterated unchanged 2026 guidance, targeting net revenue growth above market rates while sustaining strong profitability and cash generation: Q2 results underpinning the outlook were net revenue $45.8M (+18% YoY), gross margin on finished cannabis sold 55% (vs 52% Q2‑25), adjusted EBITDA $14.3M (+24% YoY; 31% margin) and cash flow from operations before working capital $13.4M (+31% YoY; 94% conversion of adjusted EBITDA). Management plans a ~$30M capital program over the next three years (including $10–12M in 2026) to raise Leamington yields ~30% vs 2025 (phased through end‑2028 with yield gains beginning in 2027), expects working capital to remain similar to last year with modest increases to support growth, aims to improve cash conversion via lower interest expense, will fund investments from cash from operations, and retains a strong balance sheet ($38M cash, $44M long‑term debt) plus ongoing NCIB activity (Q2 repurchases $5.7M for 2.6M post‑consolidation shares after a 14‑for‑1 consolidation).Auxly Cannabis Group Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 165.57M | 151.48M | 122.33M | 101.08M | 94.47M | 83.83M |
| Gross Profit | 62.76M | 86.74M | 59.93M | 21.28M | 16.51M | 19.29M |
| EBITDA | 34.91M | 50.30M | 24.38M | -10.89M | -94.79M | -18.30M |
| Net Income | 32.60M | 41.85M | -16.35M | -44.51M | -130.29M | -33.74M |
Balance Sheet | ||||||
| Total Assets | 276.20M | 271.64M | 261.53M | 261.90M | 331.82M | 450.42M |
| Cash, Cash Equivalents and Short-Term Investments | 38.95M | 32.67M | 18.50M | 15.75M | 14.78M | 14.89M |
| Total Debt | 53.67M | 57.65M | 68.47M | 159.04M | 193.59M | 190.10M |
| Total Liabilities | 90.55M | 94.06M | 145.87M | 210.86M | 246.13M | 242.31M |
| Stockholders Equity | 185.65M | 177.58M | 115.66M | 51.05M | 90.41M | 212.52M |
Cash Flow | ||||||
| Free Cash Flow | 31.67M | 23.37M | 14.02M | 6.61M | -11.67M | -50.01M |
| Operating Cash Flow | 35.10M | 25.89M | 16.78M | 8.21M | -2.48M | -49.63M |
| Investing Cash Flow | -3.39M | -2.46M | -445.00K | -1.56M | 1.18M | 17.33M |
| Financing Cash Flow | -10.43M | -9.81M | -13.59M | -5.68M | 1.18M | 26.40M |
Auxly Cannabis Group Technical Analysis
Positive
3.14
Price Trends
2.77
Positive
2.43
Positive
2.17
Positive
Market Momentum
0.12
Positive
61.32
Neutral
34.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:XLY, the sentiment is Positive. The current price of 3.14 is above the 20-day moving average (MA) of 3.13, above the 50-day MA of 2.77, and above the 200-day MA of 2.17, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 61.32 is Neutral, neither overbought nor oversold. The STOCH value of 34.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:XLY.
Auxly Cannabis Group Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$327.26M | 9.55 | 18.12% | ― | 18.79% | 10.74% | |
75 Outperform | C$1.64B | 17.31 | 6.46% | ― | 36.21% | 264.71% | |
72 Outperform | C$222.79M | 2.47 | 21.99% | ― | 38.14% | 2030.00% | |
58 Neutral | C$348.20M | -2.83 | -21.00% | ― | -18.93% | -472.15% | |
53 Neutral | C$606.55M | -2.02 | -29.85% | ― | 6.81% | 85.26% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
TSE:XLY
Auxly Cannabis Group
3.18
1.08
51.43%
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1.35
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TSE:OGI
Organigram Global
1.59
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-30.26%
TSE:ACB
Aurora Cannabis
5.45
-1.33
-19.62%
TSE:CRON
Cronos Group
4.50
1.02
29.31%
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.