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).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Canopy Growth stock research in summary

canopygrowth.com

ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Canopy Growth (Pharmaceuticals, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Canopy Growth are a good value (attractively priced) with a consolidated Value Rank of 55 (better than 55% of alternatives) but show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 32), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Canopy Growth's financial characteristics. As the company Canopy Growth's key financial metrics exhibit good value (Obermatt Value Rank of 55) but low growth (Obermatt Growth Rank of 37) and risky financing practices (Obermatt Safety Rank of 32), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 55% 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	55
Growth Rank	37
Safety Rank	32
Combined Rank	37

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

14-Nov-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	55
GROWTH
GROWTH	26	67	13	37
SAFETY
SAFETY	13	52	54	32
SENTIMENT
SENTIMENT	n/a	37	10	^new
360° VIEW
360° VIEW	n/a	77	4	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-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	55
GROWTH
GROWTH	26	67	13	37
SAFETY
SAFETY	13	52	54	32
COMBINED
COMBINED	23	83	16	37

Last update of combined financial performance: 14-Nov-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 55 (better than 55% 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 three out of four are below average for Canopy Growth. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 62, which means that the stock price is lower compared with invested capital than for 62% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 48 which means the stock price compared with what market professionals expect for future profits is higher than 52% of comparable companies, indicating a low value concerning Canopy Growth's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 62 and for the dividend yields rank which is lower than for 99% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 55, is a buy recommendation based on Canopy Growth's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Canopy Growth, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	21	34	72	48
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	55

Last update of Value Rank: 14-Nov-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 37 (better than 37% compared with alternatives), Canopy Growth shows a below-average growth dynamic in its industry. There is limited 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 77, as professionals currently expect the company to grow its profits more than 77% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 35, which means that currently professionals expect the company to grow less than 65% of its competitors, while Capital Growth has a rank of 44 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 37, is a hold 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	35
PROFIT GROWTH
PROFIT GROWTH	8	86	94	77
CAPITAL GROWTH
CAPITAL GROWTH	n/a	82	1	44
STOCK RETURNS
STOCK RETURNS	6	7	9	21
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	26	67	13	37

Last update of Growth Rank: 14-Nov-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 32 (better than 32% 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 41 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 59% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% 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	41
LIQUIDITY
LIQUIDITY	5	12	46	45
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	13	52	54	32

Last update of Safety Rank: 14-Nov-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: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Canopy Growth.
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