Canopy Growth stock dropped after disappointing Q3 financial results back in February. So, I thought it would be a good time to start following this company.
To be sure, the struggles facing this company are not a surprise. To illustrate, the company’s financials tell the whole story.
Canopy Growth continues to struggle with its end-to-end strategic review of operations. The review is designed to streamline its operations and improve gross margins. Instead, the company continues to bleed cash and frustrate shareholders.
Key Q3 Financial Highlights:
- Declining gross profit margins
- Negative free cash glow
- Administrative expenses continue to improve
Momentum based investors are driving the price performance of Canopy Growth shares. As a result, the use of technical analysis will help guide your trading decisions.
Technical Analysis Highlights
- support at 50 day moving average
- important support at $40 per share
- momentum indicators have yet to turn positive
Conclusion
Executives at Canopy Growth have a long way to go before the company will be profitable.
Surprisingly, Mike Lee paints a bright picture stating the company is, “firmly on a path to achieve profitability during fiscal 2022.”
Honestly, we’ll see about that.
Indeed, Canopy Growth has demonstrated its ability to destroy shareholder wealth. In effect, spending too much to expand operations and enrich upper management. As a result, the company is now cleaning up its own mess.
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