Canopy Growth Q2 Earnings Preview: What to Watch

Canopy Growth (WEED), one of the world’s largest cannabis companies, will report its Q2 earnings on November 5 before the opening bell.

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The pot stock has lost approximately 50% year-to-date and is currently trading close to C$17. Strong earnings could boost WEED shares, so let’s have a look at what analysts are expecting. (See Analysts’ Top Stocks on TipRanks)

According to the Zacks Consensus Estimate, Canopy Growth is expected to post a loss of $0.14 per share in Q2 2022, which represents a decrease of 187.5% from the prior-year quarter. The estimate for revenue is $116.96 billion, indicating growth of 3.3% from the second quarter of 2021.

Points to Watch

Canopy Growth’s cannabidiol (CBD) business in the United States has grown steadily lately thanks to its successful Martha Stewart CBD product line. In addition, the company’s consumer brands are experiencing strong growth thanks to the Storz & Bickel business.

Canopy’s share in the ready-to-drink category in Ontario has also been strong in recent months. In June 2021, the company acquired Supreme Cannabis, one of the top 10 licensed producers in Canada with a portfolio of premium brands.

The acquisition adds a low-cost, scalable grow-op facility in Kincardine, Ontario. In April, the company launched Vert, the company’s first exclusive Quebec brand. These developments should have contributed positively to Canopy Growth’s top line in the second quarter.

On November 2, CIBC analyst John Zamparo reiterated a Hold rating on WEED and set a price target of C$22. This implies 27.4% upside potential.

Overall, WEED scores a Hold rating among Wall Street analysts based on one Buy and eight Holds. The average Canopy Growth price target of C$26.27 implies 59.3% upside potential to current levels.