Cronos Group (CRON) AI Stock Analysis

• Market Cap: C$1.01B
• Dividend Yield: N/A
• Average Volume (3M): 113.10K
• Price to Earnings (P/E): 14.7
• Beta (1Y): 1.04
• Revenue Growth: 38.16%
• EPS Growth: N/A
• Country: CA
• Employees: 459
• Sector: Healthcare
• Sector Strength: 58
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.03
• Shares Outstanding: 385,419,000
• 10 Day Avg. Volume: 99,195
• 30 Day Avg. Volume: 113,100
• PEG Ratio: 0.10
• Price to Book (P/B): 0.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -10.00
• Enterprise Value/Market Cap: 0.18
• Enterprise Value/Revenue: 0.39
• Enterprise Value/Gross Profit: 5.20
• Enterprise Value/Ebitda: -0.80
• 1Y Price Target: C$2.24
• Price Target Upside: -14.71% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 63 Neutral
• Price Target: C$3.00 ▲(14.07%Upside)

Cronos Group's overall score is bolstered by strong earnings call highlights, including revenue growth and strategic market positioning. Financial performance is mixed due to operational inefficiencies, while technical analysis presents a cautious outlook. Valuation is fair, but the absence of a dividend yield and potential international trade challenges weigh on the score.

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 Business Overview & Revenue Model

Company Description

Cronos Group Inc. operates as a cannabinoid company. It manufactures, markets, and distributes hemp-derived supplements and cosmetic products through e-commerce, retail, and hospitality partner channels under the Lord Jones and Happy Dance brands in the United States. The company is also involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets. It sells cannabis and cannabis products, including dried cannabis, pre-rolls, edibles, concentrates, and cannabis extracts through wholesale and direct-to-client channels under its wellness platform, PEACE NATURALS; and operates under adult-use brands, Spinach. It also exports dried cannabis and cannabis oils to Germany, Israel, and Australia. Cronos Group Inc. was founded in 2012 and is based in Toronto, Canada.

How the Company Makes Money

Cronos Group generates revenue primarily through the sale of cannabis and cannabis-derived products in both the recreational and medical markets. The company's revenue streams include direct sales to consumers, wholesale distribution to licensed retailers, and international exports to markets where cannabis is legally permitted. Significant partnerships, such as the strategic investment from Altria Group, provide Cronos with financial resources and expertise to expand its market presence and product offerings. Additionally, the company's focus on research and development aims to innovate new products and enhance existing ones, contributing to its revenue growth. Revenue is further supported by the company's expansion into new markets and its commitment to building a diverse portfolio of cannabis brands tailored to different consumer preferences.

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

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

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

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
124.59M	117.61M	87.24M	91.90M	74.44M	46.72M
	Gross Profit
34.45M	25.20M	11.91M	11.97M	-17.53M	-25.83M
	EBIT
-64.65M	-76.53M	-84.80M	-116.01M	6.79M	-179.35M
	EBITDA
-38.73M	-50.21M	-71.80M	-91.27M	-192.28M	-82.73M
	Net Income Common Stockholders
49.44M	41.08M	-73.96M	-168.73M	-396.70M	-74.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
837.82M	858.80M	861.53M	877.72M	1.00B	1.29B
	Total Assets
1.15B	1.17B	1.14B	1.21B	1.40B	1.93B
	Total Debt
1.82M	2.02M	2.55M	3.88M	9.81M	9.81M
	Net Debt
-796.00M	-856.79M	-666.74M	-760.77M	-877.17M	-1.07B
	Total Liabilities
39.06M	55.33M	43.96M	72.05M	63.46M	217.51M
	Stockholders Equity
1.07B	1.06B	1.10B	1.14B	1.34B	1.71B
Cash Flow		Free Cash Flow
-7.57M	5.69M	-46.26M	-93.98M	-165.88M	-177.85M
	Operating Cash Flow
18.95M	18.84M	-42.84M	-88.95M	-153.62M	-142.46M
	Investing Cash Flow
-69.76M	175.15M	-59.50M	-1.84M	-28.90M	20.15M
	Financing Cash Flow
-3.52M	-1.23M	-1.03M	-2.90M	-13.44M	-5.46M

Cronos Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.63
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 2.63 is below the 20-day moving average (MA) of 2.75, above the 50-day MA of 2.63, and below the 200-day MA of 2.80, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 44.28 is Neutral, neither overbought nor oversold. The STOCH value of 38.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CRON.

Cronos Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRON	63 Neutral	C$1.01B	14.68	4.61%	―	38.16%	―
Sector *	54 Neutral	$5.37B	3.26	-45.10%	3.30%	16.81%	0.02%
CGC		$311.62M	―	-122.10%	―	―	―
ACB		$322.16M	37.12	4.78%	―	―	―
CURLF		$607.18M	―	-25.08%	―	―	―
TCNNF		$695.73M	―	-12.39%	―	―	―
CRLBF		$219.88M	―	-17.34%	―	―	―

Cronos Group Corporate Events

Cronos Group to Host Virtual 2025 Shareholders Meeting

Cronos Group Inc. announced that its 2025 Annual Meeting of Shareholders will be held virtually on June 20, 2025, allowing registered shareholders and proxyholders to participate online. This virtual format ensures accessibility for participants regardless of location, offering opportunities for engagement through questions and voting. The meeting’s replay will be available on the company’s website, reflecting Cronos’s commitment to transparency and stakeholder engagement.