{"id":11024,"date":"2023-08-11T07:49:30","date_gmt":"2023-08-11T07:49:30","guid":{"rendered":"https:\/\/isafespend.com\/investing\/canopy-growth-beats-analyst-targets-as-its-asset-light-strategy-bears-fruit-but-curaleafs-miss-weighs-on-pot-stocks\/"},"modified":"2023-08-11T07:49:31","modified_gmt":"2023-08-11T07:49:31","slug":"canopy-growth-beats-analyst-targets-as-its-asset-light-strategy-bears-fruit-but-curaleafs-miss-weighs-on-pot-stocks","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=11024","title":{"rendered":"Canopy Growth beats analyst targets as its \u2018asset-light\u2019 strategy bears fruit, but Curaleaf\u2019s miss weighs on pot stocks"},"content":{"rendered":"
\n

An earlier version of this story contained incorrect information about Canopy USA.<\/em> <\/p>\n

Canopy Growth Inc. disclosed another quarterly loss but managed to beat analysts\u2019 expectations as its efforts to contain costs in its Canadian business start to pay off.<\/p>\n

\n

However, an earnings miss from U.S. cannabis company Curaleaf
\n CURLF,
\n +1.64%<\/bg-quote>
\n weighed on the sector, and many cannabis stocks moved into the red on Thursday. Meanwhile, a revenue beat from Verano Holdings Corp.
\n VRNOF,
\n -1.05%<\/bg-quote>
\n failed to provide a lift to the stock. <\/p>\n

Canopy Growth
\n CGC,
\n -7.93%<\/bg-quote><\/p>\n

WEED,
\n -6.56%<\/bg-quote>
\n CEO David Klein told MarketWatch the company is leveraging efforts to reduce both its employee base and cannabis-growing capacity by 60% each as part of an \u201casset-light\u201d approach to the business.<\/p>\n

\u201cWe\u2019ve been working really hard on our transition to an asset-light business model,\u201d Klein said. \u201cOur business is now\u00a0built for today\u2019s reality\u2026Now we know what our market is going to be.\u201d\u00a0<\/p>\n

Canopy Growth is launching a strategic review of its BioSteel business, which booked C$32.5 million in sales in the first quarter. <\/p>\n

BioSteel \u201cis a great brand,\u201d but that type of consumer-packaged goods requires \u201ca lot of investment to grow\u201d and it\u2019s not the best fit for a cannabis company, Klein said.<\/p>\n

Canopy Growth\u2019s first-quarter loss of 5 cents a share beat the FactSet consensus projection for a loss of 13 cents a share. Its revenue of $80.9 million beat analysts\u2019 views of $68.3 million by a significant margin.<\/p>\n

TD Cowen analyst Vivien Azer reiterated a market-perform rating on Canopy Growth and said the company\u2019s BioSteel sports drink powered its top-line results as revenue rose 2.6% over the year-ago period. She also cited strength in its core cannabis business.<\/p>\n

\u201cThe biggest contribution to incremental revenues came from adult-use cannabis, where it seems that the revitalization work (and improved product quality) that the company is delivering in flower is resonating with consumers,\u201d Azer said.<\/p>\n

Also read: <\/strong>Green Thumb Industries posts another profit as CEO channels Warren Buffett<\/p>\n

Looking ahead, Canopy Growth continues to work on a process with the Securities and Exchange Commission to preserve its dual-listed status on both Canada\u2019s TSX and the Nasdaq as they aggregate U.S. assets under Canopy USA.<\/p>\n

It\u2019s also planning a reverse stock-split authorization at its annual general meeting on Sept. 25.<\/p>\n

Canopy reiterated the \u201cgoing concern\u201d language from the previous quarter, but it still has more than C$571 million in cash, down C$212 million from the previous quarter as it paid down debt and ran the company.<\/p>\n

Canopy Growth stock fell 9% on Thursday.<\/p>\n

Also read: <\/strong>Once-mighty Canopy Growth loses billions as dream of pot riches runs into reality of oversupply and overspending<\/p>\n

Curaleaf stock drops after revenue, earnings miss the mark<\/strong><\/h2>\n

Curaleaf Growth Corp.\u2019s
\n CURLF,
\n +1.64%<\/bg-quote>
\n stock fell 3.8% after the U.S. cannabis company\u2019s second-quarter loss of 9 cents a share fell short of the FactSet consensus estimate for a loss of 5 cents a share. The company\u2019s revenue of $338.6 million fell short of analysts\u2019 forecast of $339.3 million. <\/p>\n

Benchmark analyst Mike Hickey reiterated a hold rating on Curaleaf and said the results were disappointing, with international expansion hurting the company\u2019s margins.<\/p>\n

Despite these setbacks, \u201cCURLF has made great strides in reducing annualized expenses while prioritizing their brand portfolio in their dispensaries,\u201d Hickey said. <\/p>\n

Curaleaf CEO Matt Darin said, \u201cThe fact is that no company is better positioned than Curaleaf to capitalize on the global cannabis market opportunities when the sector eventually and fully unlocks,\u201d according to a statement. <\/p>\n

Verano emphasizes cash-flow generation<\/strong><\/h2>\n

Verano\u2019s second-quarter results marked its 10th quarter in a row of positive operating cash flow and its third quarter in a row of positive free cash flow.<\/p>\n

The company boosted the lower end of its 2023 free cash flow guidance to $65 million from $50 million and kept the top end of the range at $75 million. <\/p>\n

Verano\u2019s second-quarter loss of 4 cents a share missed analysts\u2019 estimates by a penny a share, while its revenue of $234 million beat the FactSet consensus view of $230.6 million. <\/p>\n

Alliance Global Partners analyst Aaron Grey reiterated a buy rating on Verano and cited positive developments such as signs of price stabilization and free cash flow generation that appears to be sustainable.<\/p>\n

Verano stock dipped 1% on Thursday.<\/p>\n

Also read: <\/strong>Verano cannabis cultivation takes root in massive ex-retail space as legal industry gears up<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

An earlier version of this story contained incorrect information about Canopy USA. Canopy Growth Inc. disclosed another quarterly loss but managed to beat analysts\u2019 expectations as its efforts to contain costs in its Canadian business start to pay off. However, an earnings miss from U.S. cannabis company Curaleaf CURLF, +1.64% weighed on the sector, and<\/p>\n","protected":false},"author":1,"featured_media":11025,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-11024","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nCanopy Growth beats analyst targets as its \u2018asset-light\u2019 strategy bears fruit, but Curaleaf\u2019s miss weighs on pot stocks | iSafeSpend<\/title>\n<meta name=\"description\" content=\"An earlier version of this story contained incorrect information about Canopy USA. 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