Cronos Group Inc

CRON: XTSE (CAN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	CAD 8.90	Hdmj	Bzrzchvx

Cronos Earnings: Shares Look Fairly Valued as Company’s Small Size Remains a Challenge

Kristoffer Inton

Aug 8, 2024

We don’t expect to significantly change our $2/CAD 2.90 fair value estimates for no-moat Cronos after reviewing its second-quarter results. Net revenue was up 10% sequentially to $28 million, and gross margin excluding inventory write-downs expanded 6 percentage points nicely to 24%. However, this was mostly absorbed by an increase in overhead costs, leaving adjusted EBITDA losses roughly flat at $11 million. The company looks on track to meet our pre-earnings-call full-year estimates for net revenue of $100 million and adjusted EBITDA losses of about $50 million.

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