Fact based stock research
Cronos Group (TSX:CRON)

CA22717L1013

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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.

Cronos Group stock research in summary

thecronosgroup.com

ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), Cronos Group (Pharmaceuticals, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Cronos Group are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives) and show below-average growth (Growth Rank of 31) but are safely financed (Safety Rank of 95), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on Cronos Group's financial characteristics. As the company Cronos Group's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 37) and low growth (Obermatt Growth Rank of 31), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 95) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. 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	37
Growth Rank	31
Safety Rank	95
Combined Rank	73

Country	Canada
Industry	Pharmaceuticals
Index	NASDAQ, TSX Composite
Size class	X-Small

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: Cronos Group

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	39	32	37
GROWTH
GROWTH	52	11	85	31
SAFETY
SAFETY	25	96	87	95
SENTIMENT
SENTIMENT	n/a	15	19	^new
360° VIEW
360° VIEW	n/a	29	59	^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 Cronos Group is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	39	32	37
GROWTH
GROWTH	52	11	85	31
SAFETY
SAFETY	25	96	87	95
COMBINED
COMBINED	5	44	90	73

Last update of combined financial performance: 4-Jul-2024. Stock analysis on combined financial performance: The higher the rank of Cronos Group the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), Cronos Group shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Cronos Group. 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 70, which means that the stock price is lower compared with invested capital than for 70% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 21 which means the stock price compared with what market professionals expect for future profits is higher than 79% of comparable companies, indicating a low value concerning Cronos Group'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 70 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 37, is a hold recommendation based on Cronos Group's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Cronos Group, 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)	1	12	14	21
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	4	9	9	9
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	76	74	64	70
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	1	39	32	37

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cronos Group; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Cronos Group 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 indicators below-average for Cronos Group. While Sales Growth ranks at 78, professionals currently expect the company to grow more than 78% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 35, which means that, currently, professionals expect the company to grow its profits less than 65% of its competitors, and Capital Growth has a low rank of 17. Historic stock returns were also below average with a current Stock Returns rank of 31 which means that the stock returns have recently been below 69% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. 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 isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	95	91	79	78
PROFIT GROWTH
PROFIT GROWTH	n/a	6	77	35
CAPITAL GROWTH
CAPITAL GROWTH	n/a	25	96	17
STOCK RETURNS
STOCK RETURNS	52	13	27	31
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	52	11	85	31

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cronos Group.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 95 (better than 95% compared with alternatives) for 2024, the company Cronos Group has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cronos Group is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Cronos Group.Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 97, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 97% of its competitors. Liquidity is at 1, meaning that the company generates less profit to service its debt than 99% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 95 (better than 95% compared with alternatives), Cronos Group has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Cronos Group more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	100	100	100	100
REFINANCING
REFINANCING	10	95	95	97
LIQUIDITY
LIQUIDITY	2	1	1	1
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	25	96	87	95

Last update of Safety Rank: 4-Jul-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cronos Group 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	8	5	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	67	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	56	28	^new
MARKET PULSE
MARKET PULSE	n/a	50	60	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	15	19	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cronos Group.
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