Cresco Labs (TSE:CL)
:CL
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Cresco Labs
(CL)
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Rating:45Neutral
Price Target:
C$1.00
▼(-19.35% Downside)
Action:ReiteratedDate:03/08/26
The score is held back primarily by weak financial performance (sharp revenue contraction, continued net losses, and worsening leverage despite positive cash flow). Technicals are mixed with soft momentum, while the earnings call adds modest support through margin/cash-flow progress and improved maturity profile but is tempered by near-term revenue and margin headwinds. Valuation is difficult to support due to negative earnings and no dividend yield.
Positive Factors
Margin Expansion & Profitability
Sustained expansion to mid-50s gross margin and a 25% adjusted EBITDA margin reflect improving unit economics from mix and cost control. If cultivation efficiencies and disciplined tuck‑ins continue, higher operating leverage can persist and support durable cash generation.
Negative Factors
Steep Revenue Decline
A multi‑year collapse in top line reduces scale, weakens gross cash margins over time, and amplifies fixed‑cost leverage. Sustained revenue declines make it harder to cover SG&A, slow deleveraging, and increase execution risk for achieving consistent profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin Expansion & Profitability
Sustained expansion to mid-50s gross margin and a 25% adjusted EBITDA margin reflect improving unit economics from mix and cost control. If cultivation efficiencies and disciplined tuck‑ins continue, higher operating leverage can persist and support durable cash generation.
Read all positive factors
Cresco Labs (CL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$552.21M
Dividend YieldN/A
Average Volume (3M)100.17K
Price to Earnings (P/E)―
Beta (1Y)2.25
Revenue Growth-6.48%
EPS Growth22.63%
CountryCA
Employees2,900
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)-0.34
Shares Outstanding343,233,000
10 Day Avg. Volume81,434
30 Day Avg. Volume100,169
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)1.22
Price to Sales (P/S)0.62
P/FCF Ratio10.78
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$2.50Price Target Upside101.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)-0.11
Revenue Forecast (FY)C$624.12M
Cresco Labs Business Overview & Revenue Model
Company Description
Cresco Labs Inc., together with its subsidiaries, cultivates, manufactures, and sells retail and medical cannabis products in the United States. It provides cannabis in flowers, vape pens, live resins, disposable pens, and extracts under the Cresc...
How the Company Makes Money
Cresco Labs primarily makes money by selling cannabis products through two core channels: (1) Wholesale revenue: Cresco manufactures and distributes its branded cannabis products to third-party dispensaries within the states where it is licensed t...
Cresco Labs Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call emphasizes sustained operational progress: meaningful margin expansion, consistent cash generation, a strengthened balance sheet, and market leadership in core states. Management also flagged near-term headwinds including modest revenue softening, a ~6% wholesale decline, an expected high single-digit sequential revenue drop in Q1 (driven by Michigan tax changes and the California exit), non-recurring margin items, competitive price compression, and a New York impairment. Overall, the company appears structurally stronger and focused on disciplined capital allocation and selective M&A, with near-term challenges that management believes are manageable and transitory.Positive Updates
Quarterly Revenue and Profitability
Reported Q4 revenue of $162,000,000, adjusted gross profit of $84,000,000, adjusted EBITDA of $40,000,000 and operating cash flow of $27,000,000, demonstrating positive cash generation and profitability in the quarter.
Negative Updates
Modest Revenue Softening and Wholesale Decline
Management acknowledged modest revenue softening in Q4 and disclosed wholesale revenue declined approximately 6% quarter over quarter as the company prioritized first-party retail over lower-margin wholesale volumes.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly Revenue and Profitability
Reported Q4 revenue of $162,000,000, adjusted gross profit of $84,000,000, adjusted EBITDA of $40,000,000 and operating cash flow of $27,000,000, demonstrating positive cash generation and profitability in the quarter.
Read all positive updates
Company Guidance
Management guided that Q1 should see a high-single-digit sequential decline in revenue (mostly from Michigan excise tax changes and the California exit) after reporting Q4 revenue of $162M and FY2025 revenue of $656M; Q4 adjusted gross profit was $84M (adjusted gross margin 52.2% vs. 48.8% in Q3), adjusted EBITDA was $40M (25.0% of revenue, up from 24.1%), adjusted SG&A was $49M (30.5% of revenue), operating cash flow was $27M in Q4 and $73M for the full year, capex was $9M in Q4, year-end cash was $94M with no near‑term maturities and debt maturities extended to 2030. Management expects gross margin to normalize from Q4’s elevated level as seasonal mix shifts and ongoing price compression continue, anticipates SG&A will remain generally consistent with recent run rates (i.e., no repeat of the prior-period bad-debt reserve benefit), reiterated that Q1 is not a change in direction, and said performance should build through 2026 as cultivation efficiencies, mix improvements and disciplined M&A/tuck‑in activity drive operating leverage.Cresco Labs Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
33
Negative
Cash Flow
49
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 667.33M | 724.34M | 770.88M | 842.68M | 821.68M |
| Gross Profit | 324.57M | 364.45M | 362.37M | 407.01M | 406.35M |
| EBITDA | 20.34M | 114.28M | -13.97M | -10.66M | -159.63M |
| Net Income | -137.78M | -74.44M | -175.52M | -212.05M | -319.60M |
Balance Sheet | |||||
| Total Assets | 1.20B | 1.36B | 1.36B | 1.58B | 1.78B |
| Cash, Cash Equivalents and Short-Term Investments | 90.92M | 137.56M | 103.43M | 119.34M | 223.54M |
| Total Debt | 583.10M | 639.64M | 682.76M | 670.17M | 624.74M |
| Total Liabilities | 943.08M | 967.18M | 930.40M | 996.01M | 982.73M |
| Stockholders Equity | 339.83M | 474.85M | 505.69M | 627.04M | 755.55M |
Cash Flow | |||||
| Free Cash Flow | 38.41M | 108.99M | 681.00K | -67.39M | -82.57M |
| Operating Cash Flow | 74.17M | 132.48M | 58.56M | 18.74M | 14.49M |
| Investing Cash Flow | -41.42M | -25.23M | -44.59M | -36.58M | -163.93M |
| Financing Cash Flow | -83.52M | -71.48M | -26.91M | -86.64M | 235.00M |
Cresco Labs Technical Analysis
Negative
1.24
Price Trends
1.42
Negative
1.45
Negative
1.38
Negative
Market Momentum
-0.03
Negative
42.79
Neutral
50.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CL, the sentiment is Negative. The current price of 1.24 is below the 20-day moving average (MA) of 1.32, below the 50-day MA of 1.42, and below the 200-day MA of 1.38, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 42.79 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CL.
Cresco Labs Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | C$1.97B | 16.23 | 6.29% | ― | 6.18% | -28.69% | |
56 Neutral | C$1.52B | -13.95 | -9.71% | ― | 4.27% | 3.41% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | C$2.31B | -8.05 | -28.58% | ― | -3.38% | -31.35% | |
48 Neutral | C$2.17B | -1.75 | -30.10% | ― | -4.58% | -141.91% | |
45 Neutral | C$552.21M | -1.18 | -33.00% | ― | -6.48% | 22.63% | |
40 Neutral | C$18.10M | -0.08 | ― | ― | 0.63% | -31.86% |
* Healthcare Sector Average
TSE:CL
Cresco Labs
1.24
0.14
12.73%
TSE:CURA
Curaleaf Holdings
2.98
1.56
109.86%
TSE:AYR.A
Ayr Wellness
0.16
-0.09
-36.73%
TSE:GTII
Green Thumb Industries
8.50
0.17
2.04%
TSE:TRUL
Trulieve Cannabis
7.91
2.38
43.04%
TSE:VRNO
Verano Holdings
6.32
0.00
0.00%
Cresco Labs Corporate Events
Business Operations and StrategyFinancial Disclosures
Cresco Labs Grows Cash Flow and Margins Despite 2025 Impairment Charges
Positive
Mar 5, 2026
Cresco Labs reported full-year 2025 revenue of $656 million, gross profit of $325 million and adjusted EBITDA of $157 million, while generating $73 million in operating cash flow and $38 million in free cash flow. The company reduced adjusted SGA,...
Business Operations and StrategyFinancial Disclosures
Cresco Labs Sets March 5 Date to Report Q4 and Full-Year 2025 Results
Neutral
Feb 23, 2026
Cresco Labs announced it will release its full-year and fourth-quarter 2025 financial results on March 5, 2026, before the market opens, followed by an earnings conference call and webcast for investors. The planned disclosure underscores the comp...
Business Operations and StrategyPrivate Placements and Financing
Cresco Labs Launches US$100 Million At-the-Market Equity Program
Positive
Jan 30, 2026
Cresco Labs has established an at-the-market (ATM) equity offering program that will allow it to issue and sell up to approximately US$100 million (C$140 million) of subordinate voting shares from time to time through Haywood Securities on Canadia...
Business Operations and Strategy
Cresco Labs Expands Florida Footprint With New Sunnyside Tamarac Dispensary
Positive
Jan 9, 2026
Cresco Labs has opened a new Sunnyside dispensary in Tamarac, Florida, its 31st location in the state and 72nd nationwide, expanding its medical cannabis retail footprint in what it describes as the largest medical market in the U.S. The Sunnyside...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.