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Cronos Group (US) (TSE:CRON)
:CRON
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Cronos Group (CRON) AI Stock Analysis

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TSE:CRON

Cronos Group

(NASDAQ:CRON)

Rating:65Neutral
Price Target:
C$3.00
▲(9.09%Upside)
Cronos Group's overall stock score reflects a balance of solid financial health, market leadership, and strategic initiatives against operational inefficiencies and potential regional challenges. The earnings call and corporate events positively influence the score by demonstrating strong market presence and shareholder confidence.
Positive Factors
Financial Health
Cronos Group has robust liquidity and an asset-light model which supports its operations.
Sales Growth
Growth was strong in multiple markets, including a 57% increase in Israel and 183% in other countries.
Negative Factors
Profitability Uncertainty
The timing of profitability is unclear, and the company is not expected to achieve positive adjusted EBITDA before 2026.
Regulatory Challenges
Regulatory challenges, including unclear US federal cannabis reform and changes to the Canadian Cannabis Act, are significant factors that negatively impact the stock's valuation.
Valuation Pressure
Cronos Group's enterprise value is slightly negative, attributed to the lack of US reform and investor restrictions, which pressures the stock compared to its peers.

Cronos Group (CRON) vs. iShares MSCI Canada ETF (EWC)

Cronos Group Business Overview & Revenue Model

Company DescriptionCronos Group Inc. is a globally diversified and vertically integrated cannabis company, operating within the consumer packaged goods sector. The company focuses on the production and distribution of cannabis and cannabis-derived products for both the medical and recreational markets. Its core product offerings include dried cannabis, cannabis oils, and derivative products such as edibles and topicals. Operating with a portfolio of brands, Cronos Group aims to create disruptive intellectual property by advancing cannabis research, technology, and product development.
How the Company Makes MoneyCronos Group generates revenue primarily through the cultivation, manufacture, and sale of cannabis and cannabis-derived products. The company operates under a variety of brands, each targeting different consumer segments in the medical and adult-use markets. Key revenue streams include the sale of dried cannabis flower, cannabis oils, and derivative products like edibles, vapes, and topicals. Cronos Group has established significant partnerships, including a notable one with Altria Group, Inc., which provides financial backing and expertise in regulatory affairs and product development. These partnerships, along with strategic international operations, contribute to its revenue by expanding market reach and enhancing product offerings.

Cronos Group Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 7.42%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
Cronos Group's earnings call highlighted strong revenue growth and market leadership in both domestic and international markets, notably in Israel. The company has a solid balance sheet and is undertaking strategic expansions to address supply constraints. However, challenges include potential tariffs in Israel and temporary supply constraints affecting growth. Despite these challenges, the positive aspects largely outweigh the negatives.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Cronos reported consolidated net revenue of $32.3 million, a 28% increase from the prior year period, with constant currency net revenue growth at 33% year-over-year.
Market Leadership in Canada
The Spinach brand holds the second most popular brand position in Canada with 4.6% market share. In edibles, it maintains the number one position with 20.7% market share.
International Expansion Success
Cronos Israel grew revenue by over 40% year-over-year, with Israeli sales contributing nearly 30% of consolidated net revenue. Peace Naturals brand ended as the number one flower brand in Israel.
Improved Gross Margins
The adjusted gross margin improved significantly to 44% in Q1 2025, compared to 18% in Q1 2024.
Strong Balance Sheet
Cronos maintains a strong balance sheet with $838 million in cash and equivalents, and announced a $50 million share repurchase program.
Negative Updates
Product Supply Constraints
The Spinach brand faced supply constraints due to high consumer demand, leading to restricted growth temporarily.
Potential Tariffs in Israel
Israel is considering tariffs of up to 165% on Canadian cannabis imports, which could impact Cronos's business in the region.
Growth Margin and OpEx Normalization
Though gross margins improved, part of the improvement was timing-related. Operating expenses are expected to rise in the rest of 2025.
Company Guidance
In the 2025 first quarter earnings call, Cronos Group provided several key metrics and guidance for the fiscal year. The company's net revenue was reported at $32.3 million, marking a 28% increase from the previous year, with their adjusted gross margin improving to 44%. The Spinach brand secured a 4.6% market share in Canada, while the SOURZ by Spinach line held a 23% share in the gummy category. The Lord Jones brand maintained a 30.1% market share in the hash-infused pre-roll segment. Internationally, the Peace Naturals brand was the top flower brand in Israel with over 20% market share. Cronos announced a $50 million share repurchase program, maintaining a strong balance sheet with $838 million in cash and no debt. The company anticipates their GrowCo expansion to alleviate current supply constraints, aiming to bolster market share and operational efficiencies moving forward.

Cronos Group Financial Statement Overview

Summary
Cronos Group shows solid revenue growth and improved net profit margins, though operational inefficiencies persist with negative EBIT. The balance sheet is robust with low leverage and high liquidity, but negative free cash flow is a concern. Strategic improvements in operational efficiency and investment allocation are needed.
Income Statement
55
Neutral
Cronos Group shows a positive trend in revenue growth with a 6% increase in TTM (Trailing-Twelve-Months) compared to the previous year. Despite this, the company struggles with negative EBIT and EBITDA margins, indicating operational inefficiencies. However, a notable improvement in net profit margin from previous losses to a positive stance suggests some recovery in profitability. Continued focus on cost management is crucial to sustain this trajectory.
Balance Sheet
70
Positive
The balance sheet reflects strong stability with a low debt-to-equity ratio and a high equity ratio of 92% in TTM, indicating robust financial health and low leverage. The significant cash reserves bolster liquidity, although the reduction in total assets over the years might indicate a need for strategic investments to support growth.
Cash Flow
60
Neutral
Operating cash flow improved year-on-year, and the company maintains a positive operating cash flow to net income ratio, reflecting efficient cash management. However, negative free cash flow growth signals potential pressure on cash reserves if investment activities continue at the current rate. Strategies to optimize capital expenditure could enhance cash flow stability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue124.59M117.61M87.24M91.90M74.44M46.72M
Gross Profit34.45M25.20M11.91M11.97M-17.53M-25.83M
EBITDA-38.73M-50.21M-71.80M-91.27M-192.28M-82.73M
Net Income49.44M41.08M-73.96M-168.73M-396.70M-74.62M
Balance Sheet
Total Assets1.15B1.17B1.14B1.21B1.40B1.93B
Cash, Cash Equivalents and Short-Term Investments837.82M858.80M861.53M877.72M1.00B1.29B
Total Debt1.82M2.02M2.55M3.88M9.81M9.81M
Total Liabilities39.06M55.33M43.96M72.05M63.46M217.51M
Stockholders Equity1.07B1.06B1.10B1.14B1.34B1.71B
Cash Flow
Free Cash Flow-7.57M5.69M-46.26M-93.98M-165.88M-177.85M
Operating Cash Flow18.95M18.84M-42.84M-88.95M-153.62M-142.46M
Investing Cash Flow-69.76M175.15M-59.50M-1.84M-28.90M20.15M
Financing Cash Flow-3.52M-1.23M-1.03M-2.90M-13.44M-5.46M

Cronos Group Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.75
Price Trends
50DMA
2.73
Positive
100DMA
2.66
Positive
200DMA
2.76
Negative
Market Momentum
MACD
0.03
Positive
RSI
48.08
Neutral
STOCH
31.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CRON, the sentiment is Negative. The current price of 2.75 is below the 20-day moving average (MA) of 2.81, above the 50-day MA of 2.73, and below the 200-day MA of 2.76, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 31.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CRON.

Cronos Group Risk Analysis

Cronos Group disclosed 78 risk factors in its most recent earnings report. Cronos Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Cronos Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (46)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
C$1.09B15.354.61%38.16%
63
Neutral
C$1.21B-12.39%7.23%64.93%
62
Neutral
$1.57B-25.08%-0.11%11.22%
57
Neutral
$370.10M104.973.05%26.98%
55
Neutral
$419.38M-17.34%-4.38%46.68%
46
Neutral
C$205.89M-3.31-23.14%2.77%20.79%-0.36%
45
Neutral
$345.99M-122.10%-18.39%35.21%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CRON
Cronos Group
2.76
-0.51
-15.60%
TSE:WEED
Canopy Growth
1.45
-7.94
-84.56%
TSE:ACB
Aurora Cannabis
6.24
-2.14
-25.54%
TSE:TRUL
Trulieve Cannabis
6.50
-7.33
-53.00%
TSE:CURA
Curaleaf Holdings
1.94
-3.31
-63.05%
TSE:CL
Cresco Labs
0.89
-1.31
-59.55%

Cronos Group Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Cronos Group Reports Strong Shareholder Support at 2025 Annual Meeting
Positive
Jun 23, 2025

Cronos Group Inc. announced the results of its 2025 Annual Meeting of Shareholders, where 71.87% of common shares were represented. All nominated directors were elected with over 92.3% approval, and shareholders approved an advisory resolution on executive compensation and the appointment of Davidson & Company LLP as the independent auditor for 2025. These results reflect strong shareholder support and are expected to positively impact the company’s governance and operational strategies.

The most recent analyst rating on (TSE:CRON) stock is a Sell with a C$2.00 price target. To see the full list of analyst forecasts on Cronos Group stock, see the TSE:CRON Stock Forecast page.

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.Date of analysis: Jul 30, 2025