Fact based stock research
Canopy Growth (TSX:WEED)

CA1380351009

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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Canopy Growth stock research in summary

canopygrowth.com

ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), Canopy Growth (Pharmaceuticals, Canada) shares have lower financial characteristics compared with similar stocks. Shares of Canopy Growth are a good value (attractively priced) with a consolidated Value Rank of 56 (better than 56% of alternatives) but show below-average growth (Growth Rank of 23), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on Canopy Growth's financial characteristics. As the company Canopy Growth's key financial metrics exhibit good value (Obermatt Value Rank of 56) but low growth (Obermatt Growth Rank of 23) and risky financing practices (Obermatt Safety Rank of 34), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 56% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	56
Growth Rank	23
Safety Rank	34
Combined Rank	24

Country	Canada
Industry	Pharmaceuticals
Index	SDG 10, SDG 13, SDG 16, SDG 17, SDG 3, TSX Composite
Size class	Small

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Canopy Growth

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	11	67	40	56
GROWTH
GROWTH	26	67	13	23
SAFETY
SAFETY	13	52	54	34
SENTIMENT
SENTIMENT	n/a	37	10	^new
360° VIEW
360° VIEW	n/a	77	4	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Canopy Growth is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	11	67	40	56
GROWTH
GROWTH	26	67	13	23
SAFETY
SAFETY	13	52	54	34
COMBINED
COMBINED	23	83	16	24

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Canopy Growth the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 56 (better than 56% compared with alternatives), Canopy Growth shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Canopy Growth. Price-to-Sales (P/S) is 55, which means that the stock price compared with what market professionals expect for future sales is lower than for 55% of comparable companies, indicating a good value concerning Canopy Growth's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 62% of alternatives (38% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 0, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 56, is a buy recommendation based on Canopy Growth's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Canopy Growth may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	21	34	72	55
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	n/a	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	74	90	13	62
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	11	67	40	56

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Canopy Growth; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Canopy Growth shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Canopy Growth. While Profit Growth has a good rank of 75, as professionals currently expect the company to grow its profits more than 75% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 38, which means that currently professionals expect the company to grow less than 62% of its competitors, while Capital Growth has a rank of 8 and Stock Returns have been below market median, with a rank of 21 (79% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	26	41	34	38
PROFIT GROWTH
PROFIT GROWTH	8	86	94	75
CAPITAL GROWTH
CAPITAL GROWTH	n/a	82	1	8
STOCK RETURNS
STOCK RETURNS	6	7	9	21
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	26	67	13	23

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Canopy Growth.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Canopy Growth has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Canopy Growth is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Canopy Growth. Liquidity is at 45, meaning that the company generates less profit to service its debt than 55% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 25, meaning the company has an above-average debt-to-equity ratio. It has more debt than 75% of its competitors. Finally, Refinancing is at a rank of 43 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 57% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Canopy Growth has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Canopy Growth because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	50	53	17	25
REFINANCING
REFINANCING	56	87	75	43
LIQUIDITY
LIQUIDITY	5	12	46	45
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	13	52	54	34

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Canopy Growth and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	6	3	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	57	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	56	59	^new
MARKET PULSE
MARKET PULSE	n/a	66	3	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	37	10	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Canopy Growth.
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