• CGC stock reported EPS of C$-1.46 on revenue of C$111.8 million.
  • Wall Street had expected adjusted EPS of C$-0.21 on revenue of C$130 million.
  • Canopy Growth share price is down 77% over the past year.

Canopy Growth (CGC) stock is down 11.9% at $4.89 in Friday's premarket after releasing earnings before the market opened that drastically underperformed expectations. The Canadian cannabis producer, which once traded above $59 a share, has been laid low by reporting earnings per share (EPS) of C$-1.46 on revenue of C$111.8 million. Wall Street had expected an EPS loss of C$-0.21 and revenue near C$130 million.

CGC stock advanced a whopping 10.3% on Thursday as life returned to riskier stocks and traders bet on a Friday earnings beat, the earnings miss was greatly unexpected.

Canopy Growth Stock News: Revenue falling

Canopy's revenue dropped nearly 25% YoY, a result that had been somewhat hinted at by Alliance Capital Partners earlier in the week.

"Achieving profitability is critical and we have undertaken additional initiatives to streamline and drive efficiencies for our global cannabis business," said CFO Judy Hong. "In FY2023, we are focused on executing our path to profitability in Canada, while we continue to invest in high potential opportunities – particularly in BioSteel, and further developing our US THC ecosystem, which we believe remains significantly under-appreciated by the market."

Through a restructuring that was previously announced, Canopy said they see COGS savings (cost of goods sold) in the realm of C$30 to C$50 million and SG&A savings between C$70 to C$100 million over the next 12 to 18 months. They are going to require a lot more than that to make a profit however. The reported quarter had a net loss of more than C$578 million.

"Canopy Growth is building the industry's leading portfolio of premium brands across North America," said CEO David Klein, who joined the company last year from beer and spirits giant Constellation Brands. "We've taken concrete steps to advance this ambition by strengthening our positioning in Canada, and further bolstering our U.S. THC ecosystem through the addition of two high performance brands in Wana Brands and Jetty Extracts. In the fiscal year ahead, we will remain focused on growing our market share in the key segments that will drive profitable growth and continuing to scale our premium brands across North America."

Alliance Capital Partners' Aaron Grey lowered his firm's price target from C$11 to C$8 on CGC stock, saying that he was concerned the corporation was losing market share. This last worry seems to have come to pass, although it is uncertain exactly where Canopy's market share currently sits along various segments. Grey did say he was interested in what management had to say on its recent investment in Jetty Extracts. Canopy invested about $69 million worth of cash and common stock to buy a 75% stake in the cannabis vape and extract producer based in California.

"There are significant opportunities for Jetty to scale at the state-level across the US by leveraging Canopy's U.S. ecosystem,” said Canopy CEO David Klein on May 18. “We're actively working on plans to bring the brand to the Canadian recreational market."

Canopy Growth Stock Forecast: Support at $4.70

Canopy has the word "Growth" right in its name, so it should surprise no one that this name has plummeted 77% over the past year as growth stocks have plunged in value due to rising interest rates and inflation.

With CGC stock dropping to $4.89 in the premarket, it looks nearly certain that CGC will find support around $4.70. This is the descending bottom trend line that began on March 8. If CGC stock falls below $4.70, then shareholders are in for some trouble as the stock will begin jostling around until it finds a new all-time low. CGC will not recover until it closes above $5.60 on the daily chart. This level may be months off as Canopy Growth will require some positivity around earnings in order to provoke any type of rally.

CGC 4-hour chart


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD stays below 0.9800 after US inflation data

EUR/USD stays below 0.9800 after US inflation data

EUR/USD continues to trade in negative territory below 0.9800 in the American session on Friday. The data from the US showed that the annual PCE inflation declined to 6.2% in August but the stronger-than-expected core reading didn't allow the pair to gain traction.

EUR/USD News

GBP/USD rebounds from daily lows, reclaims 1.1100

GBP/USD rebounds from daily lows, reclaims 1.1100

GBP/USD fell to a fresh daily low below 1.1030 but managed to reverse its direction and climbed above 1.1100 during the American trading hours on Friday. The pair remains on track to snap a two-week losing streak despite having suffered heavy losses earlier in the week.

GBP/USD News

Gold extends daily rally beyond $1,670

Gold extends daily rally beyond $1,670

Gold preserved its bullish momentum and rose above $1,670 after the mixed inflation data from the US on Friday. The benchmark 10-year yield is down more than 2% as markets look to wrap up the third quarter, fueling XAU/USD's daily rally. 

Gold News

Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shytoshi Kusama, the project lead for Shiba Inu, has dropped a teaser about Shiba Eternity games for the SHIB community. Proponents expect the launch of the collectible card game to be a bullish catalyst for Shiba Inu price. 

Read more

SPDR S&P 500 ETF Trust (SPY) Forecast: We are teetering on the brink

SPDR S&P 500 ETF Trust (SPY) Forecast: We are teetering on the brink

Equity markets remain at the precipice of a technical collapse, which we examine in the weekly long-term chart below. The overall picture remains one of nervousness ahead of the upcoming Q3 earnings season.

Read more

Forex MAJORS

Cryptocurrencies

Signatures