Canopy Growth (NASDAQ:CGC) Posts Earnings Results, Beats Estimates By $0.02 EPS

Canopy Growth (NASDAQ:CGC) announced its quarterly earnings data on Friday. The company reported ($0.02) EPS 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%.The business had revenue of $142.62 million during the quarter, compared to the consensus estimate of $58.21 million.

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 Trading Up 4.1%

CGC opened at $0.97 on Friday. 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 one year low of $0.84 and a one year high of $2.38. The company has a market cap of $435.01 million, a P/E ratio of -1.64 and a beta of 0.81. The business’s 50-day simple moving average is $0.96 and its 200-day simple moving average is $1.04.

Trending Headlines about Canopy Growth

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

Insider Activity at Canopy Growth

In other news, insider Christelle Gedeon sold 58,994 shares of the business’s stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $0.97, for a total transaction of $57,224.18. Following the completion of the sale, the insider owned 705,506 shares in the company, valued at approximately $684,340.82. The trade was a 7.72% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed 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 transaction of $131,174.07. Following the sale, the chief executive officer owned 1,723,913 shares of the company’s stock, valued at $1,672,195.61. This represents a 7.27% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders have sold 224,958 shares of company stock valued at $217,137. 0.16% of the stock is owned by company insiders.

Institutional Investors Weigh In On Canopy Growth

A number of institutional investors and hedge funds have recently bought and sold shares of CGC. Bank of Montreal Can boosted its stake in Canopy Growth by 122.7% in the fourth quarter. Bank of Montreal Can now owns 25,174 shares of the company’s stock valued at $29,000 after acquiring an additional 135,970 shares in the last quarter. Boothbay Fund Management LLC acquired a new stake in shares of Canopy Growth during the second quarter worth about $30,000. WINTON GROUP Ltd purchased a new stake in shares of Canopy Growth in the 4th quarter valued at about $63,000. Sender Co & Partners Inc. purchased a new stake in shares of Canopy Growth in the 3rd quarter valued at about $63,000. Finally, Commonwealth Equity Services LLC boosted its position in shares of Canopy Growth by 23.1% in the 4th quarter. Commonwealth Equity Services LLC now owns 73,739 shares of the company’s stock valued at $84,000 after purchasing an additional 13,814 shares during the period. 3.33% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of research analysts recently issued reports on the stock. Wall Street Zen upgraded shares of Canopy Growth from a “sell” rating to a “hold” rating in a research note on Saturday. Weiss Ratings upgraded shares of Canopy Growth from a “sell (e+)” rating to a “sell (d-)” rating in a report on Wednesday, July 29th. Two analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock has a consensus rating of “Hold”.

Canopy Growth Company Profile

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.