Canopy Growth reported a 36% drop in revenue from Canadian recreational cannabis sales compared with the same quarter a year ago.
Canopy Growth stock is plummeting after the marijuana company delivered financial results that fell short of expectations.
The Canadian cannabis company (ticker: CGC) posted a per-share loss of 1.46 Canadian dollars (US$1.15) for its fiscal fourth quarter, while analysts had expected a loss of 30 Canadian cents, according to FactSet. Net revenue for the three months ended in March was C$111.8 million, below analysts’ expectations of C$130 million.
“Achieving profitability is critical and we have undertaken additional initiatives to streamline and drive efficiencies for our global cannabis business,” said CEO David Klein on Friday.
A turnaround is taking longer than expected, according to Cowen analyst Vivien Azar, who reiterated her Market Perform rating on the stock on Friday. “Until the company can show tangible evidence of improving financial performance, we do not see a meaningful catalyst to warrant share price appreciation,” she said.
The stock fell some 12% to $4.87 on Friday. Canopy stock listed in Toronto (CA WEED) fell similarly to C$6.18. Azar slashed her price target on the Canadian listed stock to C$6.50 from C$12.50 earlier.
Compared with last year, revenue from the Canadian recreational cannabis business declined 36% to C$38.9 million in the quarter while medical sales fell 4% to C$13.1 million. Canopy’s revenue from products such as BioSteel, which is a cannabis-based sports hydration drink, was down 3% to C$45.8 million versus the same quarter a year earlier. The company reported…