What's Going On With Canopy Growth Stock After Earnings?

Canopy Growth Corporation CGC shares are trading higher Thursday after the company reported its fourth-quarter financial results before the market open. Here's a look at what to know. 

What To Know:

Canopy Growth reported its Canada cannabis segment revenue increased 4% year-over-year to CA$37 million, driven by growth in the Canadian medical cannabis business. Canada medical cannabis delivered a fifth consecutive quarter of revenue growth with revenue increasing 16% year-over-year benefiting from customer mix and larger product assortment in the Spectrum Therapeutics online store. 

The company said revenue from international cannabis markets increased 32% year-over-year to $12 million, driven by growth in Germany and Poland. 

Canopy's cash outflow from operations improved 77% year-over-year, driven by cost reduction programs and reduction in interest payments, and the company's operating loss from continuing operations of $107 million represents an improvement of 80% year-over-year. 

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“We have made remarkable progress and delivered dramatic reductions in expenses, cash burn, and debt over the past year. These efforts have significantly enhanced our financial stability and moved us toward achieving positive Consolidated Adjusted EBTIDA. With no material debt maturing until 2026, Canopy is equipped to capitalize on growth opportunities and enhance shareholder value," said Judy Hong, Canopy CFO. 

Canopy shares are climbing following the fourth-quarter results and are trading above the stock's 50-day moving average of $8.82. According to data from Benzinga Pro, 17.97% of available Canopy Growth shares are being sold short. 

CGC Stock Prediction 2024:

Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.

Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Canopy Growth, an investor could make an assessment about a stock's long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For Canopy Growth, the 200-day moving average sits at $6.43, according to Benzinga Pro, which is below the current price of $8.87. For more on charts and trend lines, see a description here.

Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.

CGC Price Action: According to Benzinga Pro, Canopy Growth shares are up 4.6% at $8.87 at the time of publication Thursday.

Image: Generated using artificial intelligence via MidJourney