Canopy Growth Earnings Preview: Here’s What to Watch Out For

Canopy Growth (WEED), one of the world’s largest cannabis companies, will report its Q4 earnings on June 1 before the opening bell. Over the past year, the pot stock has gained approximately 40% and is currently trading around C$30. Strong earnings could boost WEED shares, so let’s have a look at what analysts are expecting.

Analysts on average expect Canopy Growth to post an adjusted loss of C$0.26 per share in Q4 2021, compared to an adjusted loss of C$1.55 in Q4 2020. The estimated revenue is C$151.77 million, representing an increase of 40.6% from the prior-year quarter of C$107.91 million.

Canopy missed earnings estimates in Q3 with a loss of C$2.43 per share coming in worse than analysts’ estimates for a loss of C$0.32.

Points to Watch

The cannabis producer said during its Q3 earnings call that it has strengthened its position in the Canadian recreational cannabis industry, which will probably have boosted Canopy’s Q4 performance.

Thanks to the very successful launch of its Martha Stewart CBD products, Canopy’s U.S. CBD business has gained momentum in recent months. According to the company’s latest update in February 2021, it has seen strong consumer demand. The collection is sold in more than 580 Vitamin Shoppe stores across the U.S. As the rollout is still vigorous, this trend likely continued throughout the fourth quarter. (See Canopy Growth stock analysis on TipRanks)

Last week, MKM Partners analyst William Kirk upgraded WEED to a Buy. He has a price target of $45.65 (C$55.00) on the stock which implies 79% upside potential from current levels.

Kirk stated, “We believe downside to the quarter and the share price is limited, given the consensus negative market expectations and share price performance over the last 3 months.”

Overall, consensus among Wall Street analysts on WEED is a Hold based on 2 Buys, 5 Holds, and 1 Sell. The average analyst price target of C$39.29 implies approximately 30% upside potential to current levels.

TipRanks’ Smart Score

WEED scores a 7 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns are likely to be in line with the overall market.