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Cronos Group (US) (TSE:CRON)
:CRON
Top Page
Cronos Group
(NASDAQ:CRON)
68Neutral
Positive Factors
Financial Health
Cronos Group is showing progress in sales growth and cost reduction, which indicates some improvement in the company's financial health.
Sales Growth
Growth was strong in multiple markets, including a 57% increase in Israel and 183% in other countries.
Negative Factors
Regulatory Challenges
Regulatory challenges, including unclear US federal cannabis reform and changes to the Canadian Cannabis Act, are significant factors that negatively impact the stock's valuation.
Cronos Group (CRON) vs. S&P 500 (SPY)
Market Cap
C$1.04B
Dividend YieldN/A
Average Volume (3M)150.49K
Price to Earnings (P/E)18.4
Beta (1Y)1.05
Revenue Growth35.87%
EPS GrowthN/A
CountryCA
Employees356
SectorHealthcare
Sector Strength78
IndustryPharmaceuticals
Share Statistics
EPS (TTM)0.15
Shares Outstanding382,530,800
10 Day Avg. Volume188,793
30 Day Avg. Volume150,494
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.30
Price to Cash Flow (P/CF)24.00
P/FCF Ratio24.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$3.64Price Target Upside33.27% Upside
Rating ConsensusHold
Number of Analyst Covering3
Cronos Group Business Overview & Revenue Model
Company DescriptionCronos Group Inc. is a global cannabinoid company with a focus on advancing cannabis research, technology, and product development. The company operates within the cannabis industry and is involved in the cultivation, manufacturing, and marketing of cannabis and cannabis-derived products. Cronos Group's core products include dried cannabis, cannabis oils, and derivative products that are distributed under various brands for both the medical and recreational markets.
How the Company Makes MoneyCronos Group makes money primarily through the sale of cannabis and cannabis-derived products. The company generates revenue by cultivating, manufacturing, and selling cannabis products directly to consumers and through retail partnerships. Key revenue streams include the sale of dried cannabis flower, cannabis oils, and other derivative products. The company also engages in strategic partnerships and collaborations to enhance its product offerings and expand its market reach. Notable partnerships include agreements with companies in the pharmaceutical, consumer goods, and cannabis sectors, which help to drive revenue growth and market penetration. Additionally, Cronos Group invests in research and development to innovate and improve its product portfolio, thereby attracting more customers and increasing sales.
Cronos Group Financial Statement Overview
Summary
Cronos Group shows positive revenue growth and improved net income. Despite these improvements, profitability remains a challenge with negative EBIT and EBITDA margins. The balance sheet is strong with low leverage, providing a buffer against financial volatility. Cash flow improvements are notable, yet consistent positive cash flows are necessary to support long-term growth and stability.Income Statement
Cronos Group shows a positive revenue growth rate with revenue increasing from $87.24M in 2023 to $117.62M in 2024, a significant improvement. However, the company has struggled with profitability, as indicated by negative EBIT and EBITDA margins. Gross profit margin remained positive, but net profit margin was volatile, with a net income loss turning into profit in 2024 due to non-operating gains.65
Positive
Balance Sheet
Cronos Group maintains a strong balance sheet with a high equity ratio of 91.2% in 2024, reflecting low leverage. The debt-to-equity ratio is very low at 0.002, indicating minimal reliance on debt. The return on equity improved significantly due to positive net income, but sustainability is uncertain given past volatility.70
Positive
Cash Flow
The company has demonstrated a positive turnaround in operating cash flow, from a negative $42.84M in 2023 to a positive $18.84M in 2024. The free cash flow is also positive, albeit small. However, the cash flow stability is questionable due to previous years of negative cash flow, suggesting operational improvements are needed.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 117.61M | 87.24M | 91.90M | 74.44M | 46.72M | Gross Profit |
| 25.20M | 11.91M | 11.97M | -17.53M | -25.83M | EBIT |
| -76.53M | -84.80M | -116.01M | 6.79M | -179.35M | EBITDA |
| -50.21M | -71.80M | -91.27M | -192.28M | -82.73M | Net Income Common Stockholders |
| 41.08M | -73.96M | -168.73M | -396.70M | -74.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 858.80M | 861.53M | 877.72M | 1.00B | 1.29B | Total Assets |
| 1.17B | 1.14B | 1.21B | 1.40B | 1.93B | Total Debt |
| 2.02M | 2.55M | 3.88M | 9.81M | 9.81M | Net Debt |
| -856.79M | -666.74M | -760.77M | -877.17M | -1.07B | Total Liabilities |
| 55.33M | 43.96M | 72.05M | 63.46M | 217.51M | Stockholders Equity |
| 1.06B | 1.10B | 1.14B | 1.34B | 1.71B |
| Cash Flow | Free Cash Flow | |||
| 5.69M | -46.26M | -93.98M | -165.88M | -177.85M | Operating Cash Flow |
| 18.84M | -42.84M | -88.95M | -153.62M | -142.46M | Investing Cash Flow |
| 175.15M | -59.50M | -1.84M | -28.90M | 20.15M | Financing Cash Flow |
| -1.23M | -1.03M | -2.90M | -13.44M | -5.46M |
Cronos Group Technical Analysis
Negative
2.73
Price Trends
2.81
Negative
2.86
Negative
3.01
Negative
Market Momentum
0.01
Negative
47.32
Neutral
51.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CRON, the sentiment is Negative. The current price of 2.73 is below the 20-day moving average (MA) of 2.81, below the 50-day MA of 2.81, and below the 200-day MA of 3.01, indicating a bearish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 47.32 is Neutral, neither overbought nor oversold. The STOCH value of 51.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CRON.
Cronos Group Risk Analysis
Cronos Group disclosed 96 risk factors in its most recent earnings report. Cronos Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cronos Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | C$1.04B | 18.40 | 3.80% | ― | 35.87% | ― | |
53 Neutral | $351.26M | 27.53 | 4.78% | ― | 16.39% | -98.10% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% | |
47 Neutral | $183.01M | ― | -18.27% | ― | 7.33% | 84.41% | |
32 Underperform | $290.12M | ― | -84.50% | ― | -16.27% | 76.17% |
* Healthcare Sector Average
Performance Comparison
TSE:CRON
Cronos Group
2.73
0.08
3.02%
TSE:WEED
Canopy Growth
1.59
-2.33
-59.44%
TSE:ACB
Aurora Cannabis
6.26
2.31
58.48%
TSE:OGI
OrganiGram Holdings
1.42
-1.19
-45.59%
Cronos Group Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 3.02% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
Cronos Group's earnings call highlighted strong revenue growth, improved margins, and market leadership in Canada, supported by a robust financial position. However, challenges remain, particularly in Israel and a dependency on the GrowCo expansion for future growth. Overall, the sentiment is positive due to the significant achievements and strategic positioning for future opportunities.Highlights
Significant Revenue Growth
Cronos Group achieved a 35% year-over-year increase in annual net revenue, highlighting strong performance across Canada, Israel, and international markets.
Improved Margins
The company nearly doubled its adjusted gross margins and reported a 12 percentage point improvement in adjusted gross margin for the full year 2024.
Market Leadership in Canada
Spinach brand became the number one cannabis brand in Canada by market share, with top rankings in edibles, flower, and vapes.
Strong Financial Position
Cronos maintains a strong balance sheet with $859 million in cash and cash equivalents, providing a solid foundation for future growth and expansion.
Positive Adjusted EBITDA Trend
Adjusted EBITDA improved by 45% year-over-year, indicating better operational efficiency and cost management.
Successful Expansion in International Markets
Cronos Group made progress in Germany and the UK, showing promising growth and potential for expansion.
R&D Advancements
Significant advancements in cannabis genetics and breeding programs, leading to new strains and improved cannabinoid yield.
Lowlights
Growth Dependency on GrowCo Expansion
Continued growth in the flower segment is dependent on the additional supply from the GrowCo expansion, expected in the second half of 2025.
Challenges in Israel
Cronos faced a competitive market in Israel with evolving dynamics, including increased competition and geopolitical tensions.
Operating Expenses
Despite improvements, operating expenses remain a focus area, with expectations to remain flat even with GrowCo's addition in 2025.
Company Guidance
During the fourth quarter and full year 2024 earnings call, Cronos Group highlighted several financial and operational metrics indicating significant growth and strategic positioning for future expansion. The company reported a 35% year-over-year increase in annual net revenue, reaching $117.6 million, and a 27% increase in Q4 net revenue to $30.3 million. Adjusted gross margins nearly doubled, improving by 12 percentage points to 26% for the full year. Operating expenses declined by $5 million compared to the prior year, aligning with the company's disciplined cost management strategy. Additionally, Cronos achieved an adjusted EBITDA improvement of 45% year-over-year and operating cash flow increased by $61.7 million, resulting in a positive $18.8 million for the year. The company ended the year with a robust cash position of $859 million in cash and cash equivalents, underscoring its ability to invest in growth and innovation. The expansion of GrowCo, expected to be completed in Q2 2025, is set to enhance production capabilities and meet growing demand, with first harvest and sales anticipated in the second half of 2025. Notably, Cronos' Spinach brand emerged as the number one cannabis brand in Canada by market share, with significant achievements in the edibles and flower categories, while the PEACE NATURALS brand led the Israeli market with a 24% market share in flower.Cronos Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Cronos Group Achieves Record Growth and Market Leadership in 2024
Positive
Feb 27, 2025
Cronos Group reported a significant increase in net revenue for the fourth quarter and full year of 2024, with a 27% and 35% year-over-year growth, respectively. The company has achieved market leadership with its Spinach® brand in Canada and PEACE NATURALS® in Israel, and it is making strides in Germany and the UK. With a strong balance sheet and strategic investments, Cronos is well-positioned for future growth and innovation in the cannabis industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.