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What's in Store for Canopy Growth (CGC) in Q3 Earnings?
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Canopy Growth Corporation (CGC - Free Report) is scheduled to report third-quarter fiscal 2022 results on Feb 9, before the opening bell.
In the second quarter of fiscal 2022, the company reported a loss of 39 cents, much wider than the Zacks Consensus Estimate of a loss of 14 cents.
The company missed estimates in three of the trailing four quarters and surpassed the same on one occasion, the average negative surprise being 196%.
Let's take a look at how things have shaped up prior to this announcement.
Factors at Play
Canopy Growth is likely to experience sustained robust demand for legal cannabis products in the growing Canadian recreational cannabis market. The company has been maintaining market share leadership in the premium flower category. We expect this trend to have continued in the to-be-reported quarter on the back of a new lineup of premium flower offerings introduced across its 7ACRES, 7ACRES Craft Collective and DOJA brands during the fiscal third quarter.
The company has also been growing its market share in vapes and edibles categories. Within edibles, launches of products like Deep Space XPRESS, Ace Valley Dream CBN and the Super CBD gummies in the Canadian market are likely to have contributed to the company’s fiscal third-quarter performance.
Canopy Growth has been undertaking several efforts to ramp up its U.S. cannabidiol (CBD) business, including introducing products and engaging in strategic acquisitions.
In October 2021, the company’s highly-successful Martha Stewart CBD brand introduced several products across its CBD portfolio, including the Harvest Medley CBD Wellness Gummies.
Within the vaporizer category, the company’s acquired Storz & Bickel business unveiled several new products, including the VOLCANO ONYX and the MIGHTY+ vaporizers (during the fiscal second quarter). These developments are expected to have positively contributed to the company’s fiscal third-quarter top line.
However, we are vigilant about the supply and logistics challenges faced by the Storz & Bickel business that impacted its performance in the fiscal second quarter.
Further, the recent signing of Bill AB-45 in California (in September 2021), which established the regulatory framework for CBD ingestible products, is likely to bolster the distribution of the company’s CBD portfolio in the United States.
Canopy Growth’s acquired business, BioSteel Sports Nutrition Inc., has also been registering robust performance for the past few quarters. In the fiscal second quarter, the business grew 47% year on year driven by the launch of BioSteel ready-to-drink beverages in the United States. We expect this momentum to continue in the to-be-reported quarter as well.
Per the fiscal second-quarter earnings call, the company noted that it has partnered with the Gold Network to drive distribution and establish a national chain presence for BioSteel. The company is also involved in building brand awareness for BioSteel through significant investments and notable sponsorships. Further, in November 2021, BioSteel inked one of the first college level partnerships with women’s basketball freshman phenom Azzi Fudd. These developments are likely to have considerably driven fiscal third-quarter revenues.
The Estimate Picture
The Zacks Consensus Estimate for total fiscal third-quarter revenues of $110.6 million suggests a fall of 5.51% from the prior-year quarter’s reported figure.
The consensus mark for loss stands at 23 cents per share for the fiscal third quarter. The company had reported a loss of 98 cents per share in the year-ago quarter.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:
Earnings ESP: Canopy Growth has an Earnings ESP of -13.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
LabCorp’s long-term earnings growth rate is estimated at 10.6%. LH’s earnings yield of 6.8% compares favorably with the industry’s 4.3%.
AMN Healthcare Services, Inc. (AMN - Free Report) has an Earnings ESP of +10.29% and a Zacks Rank of #1. AMN Healthcare is slated to release fourth-quarter and full-year 2021 results on Feb 17.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 6.5% compares favorably with the industry’s 0.9%.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank of #2. Henry Schein will report fourth quarter and full-year 2021 results on Feb 15.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 6.1% compares favorably with the industry’s 4.3%.
Image: Bigstock
What's in Store for Canopy Growth (CGC) in Q3 Earnings?
Canopy Growth Corporation (CGC - Free Report) is scheduled to report third-quarter fiscal 2022 results on Feb 9, before the opening bell.
In the second quarter of fiscal 2022, the company reported a loss of 39 cents, much wider than the Zacks Consensus Estimate of a loss of 14 cents.
The company missed estimates in three of the trailing four quarters and surpassed the same on one occasion, the average negative surprise being 196%.
Let's take a look at how things have shaped up prior to this announcement.
Factors at Play
Canopy Growth is likely to experience sustained robust demand for legal cannabis products in the growing Canadian recreational cannabis market. The company has been maintaining market share leadership in the premium flower category. We expect this trend to have continued in the to-be-reported quarter on the back of a new lineup of premium flower offerings introduced across its 7ACRES, 7ACRES Craft Collective and DOJA brands during the fiscal third quarter.
The company has also been growing its market share in vapes and edibles categories. Within edibles, launches of products like Deep Space XPRESS, Ace Valley Dream CBN and the Super CBD gummies in the Canadian market are likely to have contributed to the company’s fiscal third-quarter performance.
Canopy Growth Corporation Price and EPS Surprise
Canopy Growth Corporation price-eps-surprise | Canopy Growth Corporation Quote
Canopy Growth has been undertaking several efforts to ramp up its U.S. cannabidiol (CBD) business, including introducing products and engaging in strategic acquisitions.
In October 2021, the company’s highly-successful Martha Stewart CBD brand introduced several products across its CBD portfolio, including the Harvest Medley CBD Wellness Gummies.
Within the vaporizer category, the company’s acquired Storz & Bickel business unveiled several new products, including the VOLCANO ONYX and the MIGHTY+ vaporizers (during the fiscal second quarter). These developments are expected to have positively contributed to the company’s fiscal third-quarter top line.
However, we are vigilant about the supply and logistics challenges faced by the Storz & Bickel business that impacted its performance in the fiscal second quarter.
Further, the recent signing of Bill AB-45 in California (in September 2021), which established the regulatory framework for CBD ingestible products, is likely to bolster the distribution of the company’s CBD portfolio in the United States.
Canopy Growth’s acquired business, BioSteel Sports Nutrition Inc., has also been registering robust performance for the past few quarters. In the fiscal second quarter, the business grew 47% year on year driven by the launch of BioSteel ready-to-drink beverages in the United States. We expect this momentum to continue in the to-be-reported quarter as well.
Per the fiscal second-quarter earnings call, the company noted that it has partnered with the Gold Network to drive distribution and establish a national chain presence for BioSteel. The company is also involved in building brand awareness for BioSteel through significant investments and notable sponsorships. Further, in November 2021, BioSteel inked one of the first college level partnerships with women’s basketball freshman phenom Azzi Fudd. These developments are likely to have considerably driven fiscal third-quarter revenues.
The Estimate Picture
The Zacks Consensus Estimate for total fiscal third-quarter revenues of $110.6 million suggests a fall of 5.51% from the prior-year quarter’s reported figure.
The consensus mark for loss stands at 23 cents per share for the fiscal third quarter. The company had reported a loss of 98 cents per share in the year-ago quarter.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:
Earnings ESP: Canopy Growth has an Earnings ESP of -13.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp has an Earnings ESP of +9.21% and a Zacks Rank of #1. LabCorp will release fourth quarter and full-year 2021 results on Feb 10. You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp’s long-term earnings growth rate is estimated at 10.6%. LH’s earnings yield of 6.8% compares favorably with the industry’s 4.3%.
AMN Healthcare Services, Inc. (AMN - Free Report) has an Earnings ESP of +10.29% and a Zacks Rank of #1. AMN Healthcare is slated to release fourth-quarter and full-year 2021 results on Feb 17.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 6.5% compares favorably with the industry’s 0.9%.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank of #2. Henry Schein will report fourth quarter and full-year 2021 results on Feb 15.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 6.1% compares favorably with the industry’s 4.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.