Morningstar

Cronos Group Inc CRON

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Stock XTSE Rating as of
CAD 2.92 −0.03 (1.02%)
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As of Delayed Price Closed

Company Report

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Cronos Remains Far From Critical Mass to Achieve Profitability; Cash Hoard Is Most of Its Value

Kristoffer Inton

Cronos Group cultivates and sells cannabis predominantly in Canada and Israel. With 2023 net sales below CAD 100 million, it is the smallest Canadian licensed producer we cover by far. This hurts its ability to scale overhead expenses, leading us to forecast the company will not reach breakeven adjusted EBITDA profitability within our 10-year forecast. This leaves its equity value stemming from its cash hoard rather than from positive free cash flow generation.

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Price vs Fair Value

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CRON is trading at a 486% premium.
Price
CAD 2.92
Fair Value
CAD 3.20
Uncertainty
Very High
1-Star Price
CAD 4.40
5-Star Price
CAD 5.80
Economic Moat
Kkc
Capital Allocation
Trnydfmv

Bulls Say, Bears Say

Bulls

Altria Group’s investment of $1.8 billion provides Cronos with capital and a strategic partner with significant product development, branding, and regulatory experience. If successful, Altria Group may increase its ownership of Cronos or potentially acquire it.

Bears

Cronos' small size adds difficulty to reaching profitability, as it struggles to leverage overhead expenses.

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News

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Trading Information

Previous Close Price
CAD 2.95
Day Range
CAD 2.91–2.97
52-Week Range
CAD 2.33–4.28
Bid/Ask
CAD 2.90 / CAD 2.97
Market Cap
CAD 1.12 Bil
Volume/Avg
65,869 / 102,062

Key Statistics

Price/Earnings (Normalized)
57.44
Price/Sales
8.08
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
—

Company Profile

Cronos Group, headquartered in Toronto, Canada, cultivates and sells medicinal and recreational cannabis through its medicinal brand, Peace Naturals, and its two recreational brands, Cove and Spinach. Although it primarily operates in Canada, Cronos exports medical cannabis primarily to Israel. In the US, the company has an option to acquire 5.9% of US multistate operator PharmaCann on a fully diluted basis upon easing of federal prohibition.
Sector
Healthcare
Industry
Drug Manufacturers - Specialty & Generic
Stock Style Box
Small Growth
Total Number of Employees
356
Website
https://www.thecronosgroup.com

Competitors

Valuation

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Metric
CRON
CGC
ACB
Price/Earnings (Normalized)
 57.44—13.93
Price/Book Value
 0.770.950.78
Price/Sales
 8.081.741.34
Price/Cash Flow
 96.36——
Price/Earnings
CRON
CGC
ACB

Financial Strength

Metric
CRON
CGC
ACB
Quick Ratio
 26.671.481.25
Current Ratio
 28.292.153.76
Interest Coverage
 —−5.32−3.16
Quick Ratio
CRON
CGC
ACB

Profitability

Metric
CRON
CGC
ACB
Return on Assets (Normalized)
 0.99%−15.23%0.97%
Return on Equity (Normalized)
 1.02%−37.47%1.54%
Return on Invested Capital (Normalized)
 −3.66%−11.79%0.91%
Return on Assets
CRON
CGC
ACB

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