Canopy Growth Corp (NASDAQ: CGC)

Sector: Healthcare Industry: Drug Manufacturers - Specialty & Generic CIK: 0001737927
Market Cap 156.54 Mn
P/B 0.29
P/E -0.56
P/S 0.78
ROIC (Qtr) -14.77
Div Yield % 0.00
Rev 1y % (Qtr) 4.33
Total Debt (Qtr) 165.35 Mn
Debt/Equity (Qtr) 0.31

About

Canopy Growth Corp, also known as CGC, is a prominent player in the cannabis industry, specializing in the production, distribution, and sale of a diverse range of cannabis and cannabis-related products. The company's mission is to build a leading North American cannabis company by harnessing the power of the plant, fostering a purpose-driven atmosphere for its employees, and consistently seeking opportunities to meet the needs of its consumers with premium branded products. Canopy Growth's operations span across various business activities, including...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 215.98M provide 161.37x coverage of short-term debt 1.34M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 681.49M provides 4.12x coverage of total debt 165.35M, indicating robust asset backing and low credit risk.
  • Long-term investments of 137.01M provide solid 0.84x coverage of long-term debt 164.01M, indicating strategic financial planning.
  • Tangible assets of 681.49M provide robust 15.39x coverage of other current liabilities 44.29M, indicating strong asset backing.
  • Cash reserves of 215.98M provide solid 11.30x coverage of other non-current liabilities 19.12M, indicating strong liquidity.

Bear case

  • Operating cash flow of (64.08M) barely covers its investment activities of 165942.03, with a coverage ratio of -386.17, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (64.08M) provides minimal -76.90x coverage of tax expenses of 833333.33, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of (69.03M) provides weak coverage of capital expenditures of 4.95M, with a -13.94 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (278.77M) show weak coverage of depreciation charges of 29.49M, with a -9.45 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (69.03M) represents just 0.27x of debt issuance (251.60M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Drug Manufacturers - Specialty & Generic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ZTS Zoetis Inc. 56.15 Bn 21.18 5.98 7.27 Bn
2 TAK Takeda Pharmaceutical Co Ltd 48.92 Bn 221.13 1.66 36.24 Bn
3 HLN Haleon plc 46.13 Bn 25.59 3.29 -
4 TEVA Teva Pharmaceutical Industries Ltd 35.27 Bn 49.54 2.10 17.07 Bn
5 UTHR UNITED THERAPEUTICS Corp 21.76 Bn 17.11 6.95 0.00 Bn
6 VTRS Viatris Inc 14.87 Bn -4.03 1.05 14.44 Bn
7 NBIX Neurocrine Biosciences Inc 14.08 Bn 32.91 5.25 0.43 Bn
8 ELAN Elanco Animal Health Inc 11.64 Bn 323.29 2.54 4.32 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.19 24.98
EV to Cash from Ops. EV/CFO -2.33 -85.40
EV to Debt EV to Debt 0.90 265.88
EV to EBIT EV/EBIT -0.54 -32.65
EV to EBITDA EV/EBITDA -5.04 -29.50
EV to Free Cash Flow [EV/FCF] EV/FCF -2.17 -32.62
EV to Market Cap EV to Market Cap 0.96 -10.98
EV to Revenue EV/Rev 0.74 -700.14
Price to Book Value [P/B] P/B 0.29 27.22
Price to Earnings [P/E] P/E -0.56 -122.96
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.34
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.81
Dividend per Basic Share Div per Share (Qtr) 0.00 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.08
Interest Coverage Interest Coverage 0.00 -38.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -791.79 -157.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 28.60 44,776.25
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 32.65 24.45
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 79.56 18.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 32.37 37.66
EBT Growth (1y) % EBT 1y % (Qtr) 32.37 108.18
EPS Growth (1y) % EPS 1y % (Qtr) 56.80 52.88
FCF Growth (1y) % FCF 1y % (Qtr) 41.69 -54.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -17.00 25.28
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.19 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 3.68 2.10
Current Ratio Curr Ratio (Qtr) 5.50 3.92
Debt to Equity Ratio Debt/Equity (Qtr) 0.31 -1.11
Interest Cover Ratio Interest Cover Ratio 0.00 -38.10
Times Interest Earned Times Interest Earned 0.00 -38.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -123.50 -62,432.09
EBIT Margin % EBIT Margin % (Qtr) -190.55 -63,260.88
EBT Margin % EBT Margin % (Qtr) -138.08 -66,726.96
Gross Margin % Gross Margin % (Qtr) 26.80 8,332.72
Net Profit Margin % Net Margin % (Qtr) -138.50 -66,728.37