Canopy Growth Corp. (NASDAQ:CGC) (TSE:WEED) stock is plunging today. That’s because the global cannabis company released its Q4 earnings results after market close yesterday, and investors aren’t happy with the numbers. Both earnings per share (EPS) and revenue missed analysts’ expectations. EPS came in at -C$1.28 (vs. the -C$0.21 forecast), which was at least better than last year’s result of -C$1.48, and revenue was C$87.5 million (vs. the ~C$97 million forecast), down 14% year-over-year.
Investors also probably don’t like that the company has been undergoing significant changes after financial discrepancies were discovered in its sports drink branch, BioSteel. While this led to management reshuffling and legal considerations to recover damages, the company is optimistic.
The CEO, David Klein, pointed out a promising 101% revenue increase in BioSteel for Fiscal 2023, signaling a robust future. Moreover, Canopy has embarked on a transformation plan, slashing costs, reducing staff, and consolidating cultivation facilities for greater efficiency.
The company reduced its expenses by $125 million by the end of Fiscal 2023 and is projecting further savings by the end of Fiscal 2024. Meanwhile, Canopy’s net revenue for Fiscal 2023 decreased 21% year-over-year to $403 million. However, after accounting for divestitures, the revenue decline stands at 11%.
Is Canopy Growth Stock a Buy, According to Analysts?
According to analysts, Canopy Growth stock comes in as a Moderate Sell based on two Holds and three Sells assigned in the past three months. Nevertheless, the average Canopy Growth stock price target of C$1.09 implies 58.2% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell Canopy Growth stock, the most accurate analyst covering the stock (on a one-year timeframe) is John Zamparo of CIBC, with an average return of 22.63% per rating and a 64% success rate. Click on the image below to learn more.
