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What’s in Store for Canopy Growth in Next Four Quarters?

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May. 29 2019, Published 10:21 a.m. ET

Looking forward

The cannabis sector has experienced weakness not just due to investors and analysts readjusting their growth assumptions for the industry after earnings but also due to the fear of global growth and trade tensions between the US and China. In this article, let’s look at the expectations that analysts have for one of the biggest players in the industry, Canopy Growth (WEED). We’ll discuss the estimates for sales for the company over the next four quarters below.

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Growth

Over the next four quarters, Canopy Growth is estimated to report about 43 million Canadian dollars in sales, which will increase by nearly 109% from 20.7 million Canadian dollars in the previous four quarters.

As the above chart shows, sales sequentially picked up in the second, third, and fourth quarters and slowed down in the first quarter of 2020. To put it in perspective, the company is expected to report 75% growth quarter-over-quarter to 12.6 million Canadian dollars in 3Q 2019, 66% sequential growth to 21 million Canadian dollars in 4Q 2019, and to just about 7% sequential growth to 22.7 million Canadian dollars in 1Q 2020.

There are several developments that are continuing to take shape in the industry. Just yesterday, Acreage Holdings (ACRGF) indicated shareholder support for its deal with Canopy Growth. Thus, as the developments take shape, these sales estimates could change significantly as well.

Nonetheless, if the global growth were to slow down, these sales estimates could be revised downwards. Canopy Growth (CGC) was trading about 1.4% lower pre-market, while Aurora Cannabis (ACB) and Aphria (APHA) were trading lower by 1%.

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