Canopy Growth Corp Investors Shrug Off Bigger Loss as Q1 Revenue Jumps

Canopy Growth Corporation (TSX: WEED) saw its first-quarter revenue more than double to $15.8 million

SmallCapPower | August 16, 2017: Canopy Growth Corporation (TSX: WEED) Monday announced results for its first quarter ending June 30, 2017, with revenues more than doubling to $15.8 million as compared with $6.9 million in the prior-year quarter. The first quarter’s focus was on a major shift to a single platform to offer all customers access to all brands through a single online store. Launching the Tweed Main Street online store, which required moving individual Tweed, Mettrum and Bedrocan ecommerce sites offline and the migration of customers to a single new e-commerce platform, reduced sales activity over a period of ~10 business days in April, which partially impacted the revenues quarter.

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Canopy Growth sold 1,830 kilograms in the first quarter ended June 30, 2017, representing an increase of 86% over the first quarter of last year. Average sales price per gram was $7.96 for the first quarter, as compared to $7.09 last year in the same quarter and $8.03 in the fourth quarter of fiscal 2017. The slight decrease from Q4 was due to a lower proportion of oils sold in the first quarter.

Operating expenses tripled in the quarter reaching $23.9 million, as compared with $7.5 million in the year ago quarter, due to which Canopy Growth saw an overall net loss of over $4.4 million in the quarter, which was up over 12% from a year ago. Despite this, shares of Canopy Growth ended Monday’s trading session 1.6% higher at $8.96. Canopy Growth stock price has rebounded more than 28% since its early June 2017 lows.

In terms of valuation, Canopy Growth currently trades at TTM price to sales value of 37.59x, price to book value of 2.40x, and forward P/E of 111.38x.

Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.

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