Cronos Group (NASDAQ:CRON) was going to report its fourth-quarter earnings before the market opens on Thursday. However, on Monday, the company announced a delay in its earnings release. The market didn’t take the news well. The stock fell 5.8% yesterday on the Toronto Stock Exchange. Cronos Group stock also closed with a loss of 5.3% on NASDAQ. Let’s see what we can expect from the company’s fourth-quarter results.
What to expect in Q4
In a press release, Cronos Group announced that it delayed completing its financial statements. As a result, the fourth-quarter earnings release will take time. The company will announce the date and timing of its earnings release in a separate press release. Analysts’ estimates have changed slightly since the company’s last earnings. To learn more, read What to Expect from Cronos Group’s Q4 Earnings. Analysts will be waiting for Cronos Group to report positive results. Canopy Growth (NYSE:CGC)(TSE:WEED) drove cannabis stocks with its third-quarter results. Meanwhile, Aurora Cannabis (NYSE:ACB) dragged the sector down with its bleak outlook.
Analysts hope that the company’s revenue will increase by 203% YoY (year-over-year) to 17 million Canadian dollars. Sequentially, the revenue could rise 34% from the third quarter of fiscal 2019. For the fiscal year, the revenue could be around 47.8 million Canadian dollars. We discussed how the company’s new CBD brand “PEACE+,” could drive its revenue going forward.
For the fourth quarter, analysts expect Cronos Group to report an EBITDA loss of 20.6 million Canadian dollars. For the fiscal year, the losses could be around 71.5 million Canadian dollars. Analysts hope that the EBITDA losses decline in fiscal 2020 with higher revenues from Cannabis 2.0 products. More states legalizing marijuana in the US could also drive the company’s CBD product sales. Cronos Group’s gross margin could be around 45.8% in the fourth quarter.
Canopy Growth and Aurora Cannabis have reported an EBITDA loss of 91.6 million Canadian dollars and 80.2 million Canadian dollars, respectively. However, Canopy Growth’s EBITDA loss was lower than expected.
Currently, 13 analysts cover Cronos Group. Among the analysts, three recommend a “buy,” seven recommend a “hold,” two recommend a “strong-buy,” and one recommends a “sell.” Overall, analysts’ average target price for the stock is 12.00 Canadian dollars. The target price represents a 12-month upside potential of 50%. On Tuesday, Cowen downgraded Aurora Cannabis and few other stocks amid the cannabis industry’s financial struggles. However, Cowen maintained its “market perform” rating on Cronos Group “given its limited scale and reliance on third-party supply,” according to a Market Watch report.
Cronos Group’s stock performance
In 2019, Cronos Group lost 30.7% of its stock value. So far in 2020, the company has fallen by 21.3%. In comparison, Aurora Cannabis and Canopy Growth have fallen by 30.0% and 6.9%.
Stay with us for the latest news after Cronos Group’s fourth-quarter results.