Earnings Previews: Canopy Growth, Coty, DraftKings

More than 1,500 companies are reporting quarterly earnings this week. Of five in our watch list for Tuesday afternoon, three (Albemarle, MGM Resorts and Qualcomm) beat on both revenue and profits while one (Skillz) missed on both and the fifth (Fisker) had a smaller than expected loss but no reported revenue. Three companies we previewed that reported early Wednesday (Barrick Gold, Moderna and Nikola) posted mixed results.

Wednesday, we previewed seven companies set to report results after markets close Thursday. First, we looked at expectations for Airbnb, Peloton, Square and Uber. Then we previewed reports due from Cloudflare, Livent and Occidental Petroleum.

Here, we preview two companies set to report quarterly results Friday morning and one on tap before markets open on Monday. No earnings are scheduled for release Friday afternoon.

Canopy Growth

Marijuana grower and cannabis products maker Canopy Growth Corp. (NASDAQ: CGC) has seen its share price drop by about 33% over the past 12 months. Canopy Growth is the largest publicly traded cannabis company by market cap, but just barely, with a valuation of $5.28 billion. Number two Tilray’s market cap is $5.11 billion.

Canopy Growth’s one-year share price decline includes a spike that began in late December and added about 160% to the share price by mid-February. The stock has dropped 74% since that February peak. That’s also how far the stock is down over the past three years. Nothing will bolster marijuana stocks until U.S. regulators remove the dangerous drug label stuck on cannabis decades ago. The company reports results before markets open Friday.

It’s that hope for a change in U.S. law that keeps analysts from dumping these stocks. In Canopy Growth’s case, 14 of 19 analysts have a Hold rating on the stock, three have a Buy rating and two more rate the shares at Sell or Strong Sell. At the recent price of around $13.50, the upside potential to the median price target of $18.92 is almost 48%. At the high price target of $31.03, the upside potential is 130%.

Analysts estimate that Canopy Growth’s second-quarter fiscal 2022 revenue will come in at $117.55 million, which would be up 7% sequentially and 16.7% higher year over year. The consensus estimate calls for an adjusted loss per share of $0.15, down sharply from adjusted earnings per share (EPS) of $0.98 in the prior quarter and from EPS of $0.23 a year ago. For the full fiscal year, analysts expect a loss of $0.06 per share, significantly better than last year’s loss of $2.51 per share. Full-year revenue is forecast at $544.34 million, which would be nearly 13% higher.

Canopy Growth is not expected to post a profit in 2022, 2023 or 2024. The company’s enterprise value-to-sales multiple for 2022 is 9.1, and it is 6.8 for 2023 and 4.8 for 2024. The stock’s 52-week range is $12.45 to $56.50. Canopy Growth does not pay a dividend.

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