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Canopy Growth Corporation (CGC) Gains But Lags Market: What You Should Know

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Canopy Growth Corporation (CGC - Free Report) closed the most recent trading day at $9.27, moving +1.31% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.64%. Meanwhile, the Dow gained 1.08%, and the Nasdaq, a tech-heavy index, added 0.45%.

Prior to today's trading, shares of the company had lost 36.37% over the past month. This has lagged the Medical sector's loss of 3.43% and the S&P 500's loss of 0.83% in that time.

Wall Street will be looking for positivity from Canopy Growth Corporation as it approaches its next earnings report date. The company is expected to report EPS of -$0.22, up 77.55% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $119.93 million, up 2.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.04 per share and revenue of $465.32 million. These totals would mark changes of +101.85% and +7.37%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Canopy Growth Corporation. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 66.67% higher. Canopy Growth Corporation is currently a Zacks Rank #3 (Hold).

Investors should also note Canopy Growth Corporation's current valuation metrics, including its Forward P/E ratio of 256.2. For comparison, its industry has an average Forward P/E of 22.92, which means Canopy Growth Corporation is trading at a premium to the group.

Also, we should mention that CGC has a PEG ratio of 5.4. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CGC's industry had an average PEG ratio of 1.91 as of yesterday's close.

The Medical - Products industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 182, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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