CGC Stock is in Focus Ahead of the 2020 First Quarter Earnings

CGC stock

CGC stock is trading lower ahead of its earnings later this week. Canopy Growth (TSX:WEED) (NYSE:CGC) has set the release date for its Q1 2020 results on Wednesday, August 14, at the close of the day. The company will then host a conference call on August 15 with CEO Mark Zekulin and Mike Lee.

Canopy Growth to Post Loss

Analysts who cover Canopy Growth expect the company’s net loss per share for the quarter to be $0.38 and revenue to be slightly more than $109 million. In Q1 2019, the company reported around $20 million, while its net loss was $69 million or $0.30 per share.

In the fourth quarter of 2019, the company’s year-over-year net revenue quadrupled to around $71 million. However, the downside to this double-digit growth in revenue is that it did not come from organic revenue but rather from Canopy Growth’s recent purchase of Storz & Bickel. On the other hand, the company reported a net loss of $246 million or $0.74 per share.

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In the last four quarters, the company has reported bottom-line losses that are deeper than analyst estimates, and at times, this has been considerable. For instance, in the second quarter of 2019, the company reported a net loss of $0.89 per share, which was much deeper than the projected analysts’ shortfall of around $0.15 per share.

At the time of writing, CGC stock is trading lower by 1% at $32.60 on the NYSE.

Canopy Growth Leads in Market Cap

The cannabis industry is in its nascent stage, and most industry players are investing significantly in the sector as they look to build scale. Canopy Growth has done this effectively, and it is currently the largest cannabis stock in terms of market capitalization. The company has been behind the acquisition of a number of cannabis enterprises.

Besides the acquisition of Stroz and Bickel, the company most recently made a $3.4 billion acquisition deal that will give the company the right to acquire Acreage Holdings (OTCQX:ACRGF) once the United States reviews cannabis regulations that will make it possible for the acquisition to materialize.

So far this year, CGC stock is up about 10%, but down 40% from its recent peak price of $53.

>> Read More Canopy News

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