Today, Canopy Growth (WEED) (CGC) stock saw its lowest point in 2019. The stock opened at $28.3 but fell to $26.5 in the afternoon. This was the lowest point for the stock since the beginning of the year.
Decline since April
The decline in Canopy Growth stock began in April this year after it reached a peak of $52.7. The positive price action on the stock earlier this year was largely driven by optimism rather than fundamentals. As the months progressed, the weakness in the cannabis industry’s fundamentals came to light. By weakness in fundamentals, we mean the industry’s worse-than-expected earnings.
Canopy Growth stock’s recent fall was also driven by its earnings report. Investors couldn’t accept the company’s larger-than-expected losses or the blow to its bottom line. The company reported worse-than-expected negative EPS. It’ll probably be a while before investors see healthy appreciation or return on investment from CGC.
Analyst weren’t happy
After Canopy Growth’s earnings release, analysts weren’t happy. Consequently, Canopy Growth received tons of estimate revisions from analysts. To learn more, read Canopy Growth: Analysts’ Views after Its Earnings.
What about Canopy Growth’s peers?
CannTrust fell after it reported that the OCS (Ontario Cannabis Store) was returning $2.9 million worth of its products.
CannTrust’s troubles began after Health Canada found a violation in the company’s growing operations. As a result, the company’s product quality came under scrutiny. This development could explain why the OCS decided to return the products to CannTrust in the interest of public safety. CannTrust’s issues don’t seem to be going away, and if it continues heading down this path, its stock could very well fall below $1.
Canopy Growth’s peer Aurora Cannabis (ACB) was another stock that was trading lower today. It was down by 1.3%. Aurora Cannabis has been falling since April this year on broader weakness in the sector. The company, however, continues to build on its business. Just today, it announced the completion of its Hempco acquisition.