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

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TSE:CRON

Cronos Group

(TSX:CRON)

Rating:69Neutral
Price Target:
C$4.00
▲(16.28% Upside)
Cronos Group's strong earnings call performance and positive technical indicators are the most significant factors driving the stock score. The company's financial performance shows potential but is hindered by operational inefficiencies and cash flow challenges. Valuation concerns due to a high P/E ratio and lack of dividend yield also 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 (CRON) vs. iShares MSCI Canada ETF (EWC)

Cronos Group Business Overview & Revenue Model

Company DescriptionCronos Group (CRON) is a global cannabinoid company focused on the production, marketing, and distribution of cannabis products. Operating in both the medical and recreational sectors, Cronos Group offers a diverse range of products, including dried flower, oils, and edibles, leveraging innovative technology and research to create unique cannabis-derived solutions. The company is dedicated to advancing the growth of the cannabis industry while adhering to quality standards and regulatory compliance across various markets.
How the Company Makes MoneyCronos Group generates revenue primarily through the sale of its cannabis products, including dried flower, oils, and edibles. The company operates in multiple jurisdictions, capturing revenue from both recreational and medical cannabis markets. Key revenue streams include direct sales to consumers through retail dispensaries and online platforms, as well as wholesale distribution to other retailers. Additionally, Cronos Group has strategic partnerships, including a significant investment from Altria Group, which provides capital and expertise in marketing and distribution, thereby enhancing its market presence and operational capabilities. The company may also explore opportunities in international markets to further diversify its revenue sources.

Cronos Group Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: 19.44%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth and improved gross margins, driven by international expansion and robust market positioning in Canada. However, challenges with flower supply constraints and limited growth in the Canadian market were noted. Overall, the positive aspects significantly outweigh the negative, indicating a strong performance for the quarter.
Q2-2025 Updates
Positive Updates
Significant Revenue Growth
Cronos reported consolidated net revenue of $33.5 million, a 21% increase from the prior year period.
Improved Gross Margin
Gross profit in the second quarter was $14.5 million, equating to a 43% gross margin, a significant improvement from 23% in Q2 2024.
Strong Market Position in Canada
Spinach brand ended Q2 as the #2 cannabis brand in Canada with a 4.7% market share across formats. In the vape category, Spinach achieved the #4 position overall with 6.5% share.
International Expansion Success
Cronos Israel posted a record quarter growing revenue by 36% year-over-year, and PEACE NATURALS ended the quarter as the #1 flower brand in Israel with over 20% market share.
Strong Balance Sheet
Cronos maintains the strongest balance sheet in the industry with no debt and cash equivalents and short-term investments of $834 million.
Successful Cost Management
Operating expenses, excluding restructuring costs, were $19.1 million in the quarter, a year-over-year decline of $2.3 million.
Negative Updates
Flower Supply Constraints
Despite strong demand, ongoing flower supply constraints have prevented Cronos from fully meeting consumer demand.
Limited Growth in Canadian Market
Net revenue for Cronos, excluding GrowCo, was $31.2 million, representing a 13% growth year-over-year, indicating slower growth compared to international markets.
Company Guidance
During Cronos Group's 2025 Second Quarter Earnings Conference Call, the company reported a 21% year-over-year increase in net revenue, amounting to $33.5 million, with $31.2 million from Cronos excluding GrowCo. The gross profit was $14.5 million, resulting in a gross margin of 43%, a notable improvement from the previous year's 23%. Operating expenses, excluding restructuring costs, decreased by $2.3 million to $19.1 million. Adjusted EBITDA improved by $12.7 million year-over-year to $1.7 million. The company held $834 million in cash, cash equivalents, and short-term investments at the end of the quarter. The Spinach brand achieved a 4.7% market share in Canada, with 4.9% in the flower category and 6.5% in the vape category, while the Lord Jones brand led the hash-infused pre-roll segment with a 28.5% market share. Internationally, Cronos Israel posted a 36% revenue growth, with PEACE NATURALS securing over 20% market share in Israel. The company remains well-positioned for growth with its strategic investments and the upcoming expansion at GrowCo.

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
Positive
Last Price3.44
Price Trends
50DMA
2.86
Positive
100DMA
2.74
Positive
200DMA
2.78
Positive
Market Momentum
MACD
0.19
Negative
RSI
62.27
Neutral
STOCH
59.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CRON, the sentiment is Positive. The current price of 3.44 is above the 20-day moving average (MA) of 3.08, above the 50-day MA of 2.86, and above the 200-day MA of 2.78, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 62.27 is Neutral, neither overbought nor oversold. The STOCH value of 59.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
69
Neutral
$1.34B50.741.73%31.72%
56
Neutral
$2.12B-12.60%4.92%-64.84%
56
Neutral
$3.06B-24.93%-2.64%1.65%
55
Neutral
$696.34M-10.02%-5.65%73.45%
52
Neutral
$399.13M105.83-0.70%28.42%48.33%
46
Neutral
C$218.42M-0.38-24.34%3.17%19.38%-2.35%
44
Neutral
$498.42M-98.42%-4.24%55.82%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CRON
Cronos Group
3.44
0.18
5.52%
TSE:WEED
Canopy Growth
1.73
-6.99
-80.16%
TSE:ACB
Aurora Cannabis
6.58
-2.10
-24.19%
TSE:TRUL
Trulieve Cannabis
9.87
-3.58
-26.62%
TSE:CURA
Curaleaf Holdings
3.50
-0.87
-19.91%
TSE:CL
Cresco Labs
1.41
-1.06
-42.91%

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: Aug 20, 2025