Is CRON flying too high?

3:46 pm ET, 28 Mar 2019

Disclaimer: The following bite is my perspective on Cronos Group; this is not an endorsement or a recommendation for investors to buy, sell or short the stock.  

Cronos Group Inc. (CRON) shares are trading at $19.08, up 3.86% from yesterday.  Over the last month, Cronos (CRON) returned -12.27%.

The company has been active in the deal-making space, having taken a minority stake in Seth Rogen's cannabis venture.  Rogen is a well-established Hollywood actor, whose role in The Disaster Artist got him a Golden Globe award for best motion picture. 

Cronos is still tiny revenue-wise, but it has experienced explosive sales growth.  However, the firm has profitability and cash flow challenges. So what is my take on Cronos?  Here are the things I like about it.

Bulls' View 

1. The stock has cooled off in the last month.  Jumping in now is probably a better idea than doing this a month ago. 

2.  I also like Cronos' focus on high-margin alternative products, which make it easier to differentiate from companies such as Tilray and Aurora.  

3.  Cronos has a solid management team, focused on deals and partnerships.   It closed a $2.4 billion (in Canadian dollars) investment  with Altria, which has now owns 45% of the stock in Cronos.

The partnership focus is great, although at times it makes me wonder whether the company can execute well with so many plays in action. Which brings me to the cons of investing in Cronos. 

Bears' View

1.  No production capacity.  In my view, production is core, and if it is outsourced, it makes me wonder whether Cronos is just a well-executed sales and market machine. 

2. The earnings release appeared a bit odd--the results for the quarter were hidden at the bottom.   The management talk was centered around Cronos' positioning for the future. 

3. Note that CRON average analyst price target ($20.42) is only 7.02% above its current price ($19.08).  Just another data point.  

The Verdict

I don't own the stock and I am going to sit out this rally.  Given the pros and cons above, I just think it's too risky for me to jump in. 

For the latest price and information on Cronos Group Inc., visit Finstead and ask for "CRON analysis", "CRON news" or just "CRON".

Cronos (CRON) stock: still riding high

5:10 am ET, 16 Oct 2018

Cronos Group Inc. (CRON) shares are trading at $12.62, up 7.50%.  The stock is trading just 8% down from its recent peak of $13.75.  What's driving CRON stock price? What's CRON stock price forecast?

The Cronos stock clearly benefits from Wednesday's effective date for legal sales of recreational cannabis product in Canada. Marijuana investors have looked forward to October 17 for a long time.  The stock has performed exceptionally well this year: it produced a remarkable return of 424%.

Investors are bullish about Cronos because the company has major plans to increase the production of cannabis. On the other hand, some investors feel the company shares are overvalued.

Cronos entered a joint venture with MedMen Enterprises to launch retail cannabis upon legalization in Canada. To increase the production, Cronos started a joint venture with an Israeli company Gan Shmuel.  Cronos also reported that it formed a partnership with a technology institute in Israel, under which researchers will look at the potential use of cannabinoids in support of skin health and fighting skin disorders such as acne and psoriasis. 

In Australia, Cronos launched a subsidiary Cronos Australia for the research, production, manufacturing, and distribution of medical cannabis.  The Cronos Group owns a 50% stake in Cronos Australia.

What is the sentiment towards the CRON stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is positive;
  • The mid-term sentiment (3-6 months) is trending positive;
  • The long-term sentiment (9-12 months) is trending positive. 

Over the last month, Cronos Group Inc. (CRON) returned +50.9%.

Cronos Group Inc. (CRON) average analyst price target ($8.90) is -28.86% below its current price ($12.51).

For the latest price and information on Cronos Group Inc., please visit Finstead and search for "CRON price" or "CRON news".

Cronos Group (CRON) stock: trending positive, but is it overbought?

10:53 am ET, 16 Sep 2018

Cronos Group Inc. (CRON) shares are trading at 10.35, down from $12.45 earlier this month.  While the CRON stock seems to be trending downward, investors are wondering what is driving the stock price down? What's CRON stock price forecast?

Cronos Group shares have yielded a return of 555% in the past year. The stock recently dropped around 28% after Citron released a bearish report on the company but managed to regain ground. Some investors are betting on the stock to take advantage of Canada’s marijuana bull market.

The company operates two Licensed Producers (LPs) regulated within Health Canada’s Access to Cannabis for Medical Purposes Regulations (the ACMPR). It also holds a portfolio of investments in other Licensed Producers and ACMPR applicants. The company aims to diversify geographically and vertically integrate segments of the cannabis value chain.

Revenue in the second quarter rose 430% to C$3.39 million and income came at C$0.8 million compared to C$0.2 million for the same quarter last year. The company has a cash position of C$90 million with a total liquidity of C$118 million.  It raised C$100 million through an offering of common shares in April 2018.

What is the sentiment towards the CRON stock? Our technical analysis shows that: 

  • The stock short-term sentiment (next 30 days) is positive;
  • The mid-term sentiment (3-6 months) is trending positive;
  • The long-term sentiment (9-12 months) trending is positive. 

Over the last month, Cronos Group Inc. (CRON) returned +112.46%. 

Cronos Group Inc. (CRON) average analyst price target ($8.90) is -28.51% below its current price ($12.45).

For the latest price and information on Cronos Group Inc., please visit Finstead and search for "CRON price" or "CRON news".

Cronos Group (CRON) price speculation: what's next?

12:07 am ET, 07 Jun 2018

Cronos Group (CRON) stock was up 14% post market hours today.  This company,  formerly known as PharmaCan Capital Corp., is a principal investment firm that invests in businesses licensed to produce medical marijuana pursuant to Canada's Marihuana for Medical Purposes Regulations ("MMPR").

The CRON price stock is still significantly below this year's peak, $9.91, achieved in the March time frame.  So what is the CRON stock price forecast?  

The technical analysis suggests strong short-term sentiment for Chronos, along with weak mid-term sentiment and strong long-term sentiment.  

Market research firms such as Capital IQ suggest that Cronos is fairly valued, although the quality of the stock, growth stability and financial health are assessed as poor.  The quality metric uses fundamental data to assess a company’s overall earnings quality in relation to its peers. This metric uses information across all financial statements of the firm.

According to Finstead research, CRON average analyst price target is $9.04.  Based on today's price, CRON price target upside is 14.00%. (visit Finstead.com and type "CRON upside" and "CRON price target" to get the latest data).  

Cronos Group Inc. (CRON) Stock Guide

Updated at: 2:17 am ET, 19 Sep 2020

Before we start: if you're looking for CRON stock price, you can quickly find it out by visiting Finny and typing "CRON quote". If you're looking for a quick scoop on CRON stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "CRON". You'll get all this info in one place. Or you can just type "CRON news" to get the latest stock news.

Looking to buy or sell Cronos Group Inc. (CRON)? Interested in getting the full scoop on CRON, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this CRON stock guide, we'll address key questions about CRON, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are CRON earnings?
2. CRON buy or sell? What is CRON Finny Score?
3. What are the reasons to buy CRON? Why should I buy CRON stock?
4. What are the reasons to sell CRON? Why should I sell CRON stock?
5. What are CRON key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are CRON earnings?

CRON trailing 12-month earnings per share (EPS) is $1.95.

Analysis

2. CRON buy or sell? What is CRON Finny Score?

#{finnyScore:50}Our quantitative analysis shows 4 reasons to buy and 4 reasons to sell CRON, resulting in Finny Score of 50.

3. What are the reasons to buy CRON? Why should I buy CRON stock?

Here are the reasons to buy CRON stock:

  • The company has closed a Canadian $2.4 billion investment of Altria group. With fresh funds, the company can focus on its strategic capital investments.
  • Cronos has focussed on higher-margin alternate products which differentiate the company from other pot startups. This could play in the company's favor in the long-term.
  • The company's revenue growth is very solid. It has also partnered with Ginkgo Bioworks to produce Cultured Cannabinoids.
  • Cronos has strengthened its export business through production expansions in Israel, Colombia, and Australia, and distribution agreements in Poland and Germany.
  • CRON quarterly revenue growth was 29.10%, higher than the industry and sector average revenue growth (0.17% and 0.83%, respectively). See CRON revenue growth chart.
  • CRON profitability is improving. The YoY profit margin change was 331.04 percentage points. See CRON profitability chart.
  • CRON Price/Book ratio is 1.15, which is low compared to its industry peers’ P/B ratios. See CRON forward Price/Book ratio chart.
  • CRON cash to debt ratio is 130.20, higher than the average industry (0.13) and sector (0.16) cash to debt ratio. See CRON cash to debt chart.

4. What are the reasons to sell CRON? Why should I sell CRON stock?

Let's look at the reasons to sell CRON stock (i.e., the bear case):

  • We can expect cannabis taxes to go up in the future, as governments are incentivized to maximize the tax revenue.
  • The existence of the black market limits the potential price increases Cronos can push through to consumers.
  • The company is lagging other cannabis companies in building its production capacity.
  • CRON Price/Sales ratio is 60.24, which is high compared to its industry peers’ P/S ratios. See CRON forward Price/Sales ratio chart.
  • CRON short share of float is 28.36%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See CRON short share of float chart.
  • CRON short interest (days to cover the shorts) ratio is 11.19. The stock garners more short interest than the average industry, sector or S&P 500 stock. See CRON short interest ratio chart.
  • CRON Enterprise Value/Revenue multiple is 20.18, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See CRON Enterprise Value/Revenue chart.

Key Stats

5. What are CRON key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for CRON:

Metrics CRON
Price $5.05
Average Price Target / Upside N/A
Average Analyst Rating N/A
Forward Dividend Yield 0.00%
Industry Drug Manufacturers - Specialty & Generic
Sector Healthcare
Number of Employees 7
Market Cap $1.89B
Forward P/E Ratio N/A
Price/Book Ratio 60.24
Revenue (TTM) $31.41M
YoY Quarterly Revenue Growth 29.10%
Profit Margin 2,023.30%

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