Canopy Growth’s 4Q Earnings: What Can Investors Expect?

On June 20, Canopy Growth (WEED) (CGC) is scheduled to announce its fourth-quarter and fiscal 2019 earnings after the market closes. With Canopy Growth being one of the most followed cannabis stocks, investors are waiting for the upcoming report. Besides the fourth-quarter earnings, management’s guidance will be equally important. The guidance will likely set the tone for the cannabis industry’s near-term expectations.

Canopy Growth is expected to report net sales of 91 million Canadian dollars—9.6% sequential growth from 83 million Canadian dollars in the third quarter. While the numbers help us set expectations for the upcoming quarter, we must remember that most of the cannabis companies haven’t lived up to the expectations.

Even Canopy Growth missed analysts’ estimates in two of the past four quarters. The second quarter was particularly striking. The company missed the sales estimate by as much as 62%.

HEXO (HEXO) reported its earnings on June 12 with a negative revenue surprise of 7%. After the company’s earnings, the stock experienced selling pressure. HEXO stock has fallen almost 15% since its earnings were released. CannTrust (CTST) also reported a negative revenue surprise of 2.5%. Aphria (APHA) reported a negative revenue surprise of 13.5% for the third quarter ending in February.