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

Canopy Growth (NASDAQ:CGC) released its earnings results on Friday. The company reported ($0.02) EPS for the quarter, beating the consensus estimate 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 Trading Up 4.1%

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

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

Analyst Ratings Changes

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

Insider Buying and Selling

In other Canopy Growth news, insider Christelle Gedeon sold 58,994 shares of the company’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 value of $57,224.18. Following the completion of the sale, the insider owned 705,506 shares of the company’s stock, valued at approximately $684,340.82. This represents a 7.72% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CEO Luc Mongeau sold 135,231 shares of Canopy Growth stock in a transaction 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 transaction, the chief executive officer directly owned 1,723,913 shares in the company, valued at approximately $1,672,195.61. This represents a 7.27% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 224,958 shares of company stock valued at $217,137. Corporate insiders own 0.16% of the company’s stock.

Institutional Investors Weigh In On Canopy Growth

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

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.