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What to Expect from Cronos Group’s Q4 Earnings Today


Mar. 30 2020, Published 10:50 a.m. ET

Cronos (NASDAQ:CRON) will report its fourth-quarter and fiscal 2019 results after the market closes today. Originally, the company was supposed to report its earnings on February 27. The company had a delay in completing its financial statements. As a result, Cronos Group postponed its earnings results. Let’s take a look at analysts’ expectations. Cronos Group stock closed with a loss of 0.47% on March 27.

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Analysts’ estimates for Cronos Group’s Q4 earnings

Analyst expect Cronos Group to report revenues of 16.1 million Canadian dollars—growth of 189.1% YoY (year-over-year). The estimate was 17.0 million Canadian dollars in February. The revision might be due to skepticism about the company’s delayed financial statements. Also, cannabis companies struggled with declining sales and profitability. Sequentially, Cronos Group could show a revenue growth of 26.7% in the fourth quarter. For the fiscal year, analysts expect the revenue to be around 47.1 million Canadian dollars—200% growth.

Analysts expect Cronos Group to report a negative EBITDA of 20.0 million Canadian dollars. For the fiscal year, the company could report a negative EBITDA of 73.2 million Canadian dollars. Analysts expect Cronos Group’s gross margin to be around 47.8%—an increase from its gross margin in the third quarter.

Cronos Group expects to improve its revenue and profitability due to growth in its CBD products through its acquisition of Redwood Holding Group. Also, the company has a strong financial back up from its investment from Altria Group (NYSE:MO).

Hexo (TSE:HEXO) reported its second-quarter earnings today. The company’s revenue for the quarter was around 17.0 million Canadian dollars. Curaleaf (OTCMKTS:CURLF) and Charlotte’s Web reported impressive fourth-quarter results this month.

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Analysts’ recommendations for CRON stock

Currently, 13 analysts cover Cronos Group stock. Among the analysts, seven recommend a “hold,” four recommend a “buy,” one recommends a “strong-buy,” and one recommends a “strong sell.” The average target price on the stock is set at 11.46 Canadian dollars, which implies a 12-month upside potential of 30%. Recently, MKM Partners upgraded the stock from “neutral” to “buy.” The analyst is confident in Cronos Group’s cash position, strong track record, and its relationship with Altria.

With the rise in cannabis sales due to the COVID-19 pandemic, marijuana stocks have been recovering slowly. In March, Cronos Group has gained 7.5%. Last week, the stock gained 13.3%. Meanwhile, Hexo gained 67.6% last week. Today, Hexo’s shares are trading in the red after its results. At 10:01 AM ET, Hexo has fallen 15.6%, while Cronos Group has fallen 1.7%. Meanwhile, Aphria (NYSE:APHA) and Canopy Growth have fallen 6.3% and 2.8%, respectively, today.

We’ll have to wait and see if Crono Group’s results help its stock and the cannabis sector as a whole.


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