The company recently announced the formation of a U.S. holding company to give Canopy Growth a leg up when the federal government finally reclassifies marijuana. Or is that if?
Analysts have mostly soured on the stock. Of 20 brokerages covering it, nine have a Hold rating, and nine more have a Sell or Strong Sell rating. Only two rate shares at Buy. At a recent price of around $3.30 a share, the stock trades above its median price target of $3.76. At the high price target of $10.37, the upside potential is about 215%.
Analysts estimate that Canopy Growth’s second-quarter revenue for fiscal 2023 will come in at $84.64 million, which would be down 1.05% sequentially and 22.5% lower year over year. The consensus estimate calls for an adjusted loss per share of $0.16, better than an adjusted loss of $0.19 in the prior quarter and worse than the year-ago loss of $0.13 per share. For the full fiscal year ending in March, analysts expect a loss of $0.82 per share, far worse than last year’s EPS of $0.42. Full-year revenue is forecast at $351.96 million, down about 15.4%.
Canopy Growth is not expected to post a profit in 2023, 2024 or 2025. The enterprise value to sales multiple is expected to be 5.3 in 2022. Based on average estimated sales of $435.19 million and $641.76 million for 2023 and 2024, respectively, the multiple is 4.3 for 2023 and 2.9 for 2024. The stock’s 52-week trading range is $2.13 to $15.96. Canopy Growth does not pay a dividend, and the total shareholder return for the past year is negative 72.7%.
D.R. Horton
Homebuilder D.R. Horton Inc. (NYSE: DHI) posted its all-time high stock price in mid-December of 2021. Rising mortgage rates, inflation and recession fears have devastated the housing market since then, and the stock has retreated more than 20% over the past 12 months. The soft housing market is widely expected to last well into next year, largely due to mortgage rates. It is not exactly a bubble popping, but buyers are scarce on the ground.
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