Canopy Growth (NASDAQ:CGC) Announces Quarterly Earnings Results

Canopy Growth (NASDAQ:CGC) posted its quarterly earnings results on Friday. The company reported ($0.02) earnings per share for the quarter, topping 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 Up 4.1%

Shares of Canopy Growth stock traded up $0.04 during midday trading on Friday, reaching $0.97. 5,168,474 shares of the company’s stock traded hands, compared to its average volume of 2,117,951. The company has a debt-to-equity ratio of 0.31, a quick ratio of 2.64 and a current ratio of 3.34. Canopy Growth has a 52 week low of $0.84 and a 52 week high of $2.38. The company’s 50 day simple moving average is $0.96 and its 200 day simple moving average is $1.04. The company has a market cap of $435.01 million, a price-to-earnings ratio of -1.64 and a beta of 0.81.

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

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings raised Canopy Growth from a “sell (e+)” rating to a “sell (d-)” rating in a research note on Wednesday, July 29th. Two investment analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Hold”.

Insiders Place Their Bets

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

Institutional Trading of Canopy Growth

Institutional investors and hedge funds have recently modified their holdings of the company. Virtu Financial LLC bought a new stake in shares of Canopy Growth during the 4th quarter worth $117,000. Mackenzie Financial Corp raised its holdings in Canopy Growth by 173.0% in the 4th quarter. Mackenzie Financial Corp now owns 305,578 shares of the company’s stock worth $354,000 after acquiring an additional 193,633 shares during the period. Engineers Gate Manager LP acquired a new position in Canopy Growth during the 4th quarter worth $95,000. Barclays PLC lifted its position in Canopy Growth by 5,436.5% during the 4th quarter. Barclays PLC now owns 897,078 shares of the company’s stock worth $1,023,000 after acquiring an additional 880,875 shares during the last quarter. Finally, Headlands Technologies LLC boosted its holdings in Canopy Growth by 355.0% during the fourth quarter. Headlands Technologies LLC now owns 987,809 shares of the company’s stock valued at $1,126,000 after acquiring an additional 770,717 shares during the period. 3.33% of the stock is currently owned by institutional investors and hedge funds.

About Canopy Growth

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.