Auxly Cannabis Group (XLY) AI Stock Analysis

• Market Cap: C$170.88M
• Dividend Yield: N/A
• Average Volume (3M): 979.68K
• Price to Earnings (P/E): 3.6
• Beta (1Y): 1.68
• Revenue Growth: 27.38%
• EPS Growth: N/A
• Country: CA
• Employees: 388
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.01
• Shares Outstanding: 1,367,038,800
• 10 Day Avg. Volume: 1,296,089
• 30 Day Avg. Volume: 979,678
• PEG Ratio: 0.04
• Price to Book (P/B): 0.42
• Price to Sales (P/S): 0.39
• P/FCF Ratio: 3.44
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$0.25
• Price Target Upside: 78.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.05
• Revenue Forecast (FY): C$208.00M

• Rating: 67 Neutral
• Price Target: C$0.14 ▲(0.71% Upside)
• Action: Reiterated Date: 01/04/26
• Date: Action: Reiterated 01/04/26

The score is driven by improved financial performance and a low P/E, signaling a meaningful TTM profitability turnaround and discounted valuation. These positives are tempered by weak technical momentum and elevated consistency risk from historically volatile earnings and less robust cash conversion.

Positive Factors

Profitability turnaround

TTM margins near 60% gross and ~30% operating/net demonstrate substantial operational leverage and a meaningful profitability inflection. Sustained margins can generate durable cash flow, fund reinvestment or debt reduction, and provide a structural advantage versus lower-margin peers.

Improved leverage and balance sheet

A debt-to-equity around 0.38 and sizable equity position reflect a de-risked capital structure versus prior years. Lower leverage reduces refinancing risk, expands financing optionality, and increases capacity to pursue M&A or investments without immediate dilutive funding.

Positive cash generation

Sustained positive operating cash flow and free cash flow indicate the business can convert operations into cash. Positive FCF since 2023 supports capex, working capital needs, and gradual deleveraging, underpinning longer-term financial flexibility and resilience.

Negative Factors

Multi-year earnings volatility

A history of deep losses across 2021–2023 and a loss in 2024 demonstrates execution and cyclicality risks. This uneven record undermines confidence that current profitability will persist, raising uncertainty about the sustainability of returns and planning for longer-term investments.

Weak cash conversion

Operating cash flow at roughly 35% of net income signals earnings-to-cash slippage, and a ~-20.6% FCF decline shows recent deceleration. Persistent weak cash conversion would limit the company’s ability to fund growth, repay debt, or return capital despite reported profits.

Modest top-line growth

TTM revenue growth near 4.7% is modest relative to the scale of margin improvement. Reliance on margin gains rather than consistent top-line expansion makes future earnings vulnerable to pricing pressure or competitive share shifts, constraining durable growth prospects.

Auxly Cannabis Group Business Overview & Revenue Model

Company Description

Auxly Cannabis Group Inc. operates as a consumer-packaged goods company in the cannabis products market in Canada. The company focuses on developing, manufacturing, and distributing cannabis products for wellness and recreational consumers. It offers cannabis products under various forms, including vape catridges, dried flower, concentrates, chocolates, soft chews, oil drops, capsules, topicals, and hard candy under the brands KOLAB PROJECT, Dosecann, BACK FORTY, and Foray. The company was formerly known as Cannabis Wheaton Income Corp. and changed its name to Auxly Cannabis Group Inc. in June 2018. Auxly Cannabis Group Inc. was incorporated in 1987 and is based in Toronto, Canada.

How the Company Makes Money

Auxly Cannabis Group generates revenue primarily through the sale of cannabis products to both wholesale and retail markets. The company has established a revenue model that includes multiple key streams: direct sales of cannabis products through its own retail outlets, partnerships with licensed retailers, and wholesale distribution to other cannabis brands. Additionally, Auxly has engaged in strategic partnerships and collaborations with other companies within the industry to enhance its product offerings and expand its market reach. The company's focus on product innovation and compliance with regulatory requirements also contributes to its ability to attract and retain customers, ultimately driving revenue growth.

Auxly Cannabis Group Financial Statement Overview

Summary

TTM results show a sharp turnaround with strong profitability (gross margin ~59.5%, EBIT margin ~29.5%, net margin ~31.1%) and improved leverage (debt-to-equity ~0.38) supporting strong ROE (~32.7%). Offsetting this is a volatile multi-year history of losses and balance-sheet swings, plus weaker cash quality: free cash flow is positive (~$15.9M) but down YoY (~-20.6%) and operating cash flow is only ~35% of net income.

Income Statement

Profitability has inflected sharply higher in TTM (Trailing-Twelve-Months), with strong gross margin (~59.5%) and solid operating profitability (EBIT margin ~29.5%), resulting in a healthy net margin (~31.1%). Revenue is still growing (TTM growth ~4.7%), but the longer-term track record is volatile: 2024 was loss-making and 2021–2023 showed deep losses and negative margins. Key strength is the magnitude of the recent turnaround; key risk is sustainability given prior years’ inconsistent earnings.

Balance Sheet

Leverage has improved meaningfully versus 2022–2023: TTM debt-to-equity is moderate (~0.38) and equity is sizable (~$172.5M), supporting a strong TTM return on equity (~32.7%). However, the balance sheet has seen significant swings historically, including very high leverage in 2023 (debt-to-equity >3x) and negative returns in multiple years. Strength is the current de-risked leverage profile; weakness is the historical volatility in capitalization and returns.

Cash Flow

Cash generation is positive, with TTM operating cash flow (~$18.6M) and free cash flow (~$15.9M) both in the black. That said, free cash flow declined year-over-year (TTM growth ~-20.6%), and cash conversion is not fully keeping pace with reported profitability (operating cash flow is ~35% of net income in TTM), suggesting some earnings-to-cash slippage. Strength is sustained positive free cash flow since 2023; weakness is the recent deceleration and less robust cash conversion in TTM (Trailing-Twelve-Months).

Breakdown	TTM	Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	146.00M	122.33M	101.08M	94.47M	83.83M	50.80M
Gross Profit	86.93M	59.93M	21.28M	17.92M	19.29M	11.14M
EBITDA	53.87M	24.38M	-10.89M	-93.40M	-13.64M	-57.18M
Net Income	45.34M	-16.35M	-44.51M	-130.29M	-45.91M	-87.43M
Balance Sheet
Total Assets	276.43M	261.53M	261.90M	331.82M	450.42M	378.96M
Cash, Cash Equivalents and Short-Term Investments	30.62M	18.50M	15.75M	14.78M	14.89M	21.50M
Total Debt	65.99M	68.47M	159.04M	193.59M	190.10M	124.68M
Total Liabilities	103.91M	145.87M	210.86M	246.13M	242.31M	187.43M
Stockholders Equity	172.52M	115.66M	51.05M	90.41M	212.52M	195.94M
Cash Flow
Free Cash Flow	15.86M	14.02M	6.61M	-11.67M	-50.01M	-53.86M
Operating Cash Flow	18.57M	16.78M	8.21M	-2.48M	-49.63M	-33.13M
Investing Cash Flow	-2.60M	-445.00K	-1.56M	1.18M	17.33M	-14.53M
Financing Cash Flow	-4.44M	-13.59M	-5.68M	1.18M	26.40M	24.74M

Auxly Cannabis Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:XLY, the sentiment is Negative. The current price of 0.14 is above the 20-day moving average (MA) of 0.12, above the 50-day MA of 0.14, and above the 200-day MA of 0.13, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 47.54 is Neutral, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:XLY.

Auxly Cannabis Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
XLY	67 Neutral	C$170.88M	3.64	31.46%	―	27.38%	―
CRON	60 Neutral	$1.37B	-106.80	-0.88%	―	22.20%	―
TRUL	56 Neutral	C$1.57B	-9.64	-9.14%	―	4.27%	3.41%
ACB	52 Neutral	C$288.08M	-3.23	-16.05%	―	23.87%	-19.57%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
OGI	47 Neutral	C$263.52M	13.27	4.77%	―	62.15%	60.50%
WEED	46 Neutral	C$539.72M	-0.81	-47.80%	―	-0.67%	58.98%

Auxly Cannabis Group Corporate Events

Auxly Caps Strong 2025 With New Product Wins and Sets 2026 Growth Plan

Auxly reported that 2025 was a strong year marked by market share gains, with the company ranking as the third-largest licensed producer in Canada and its Back Forty label holding the top cannabis brand position nationwide. Key innovations included the successful launch of Back Forty Backpackers pre-rolls, which quickly became top-10 SKUs and expanded across multiple provinces, and the introduction of the South Point brand, which offers craft-style dried flower and pre-rolls from its Southwestern Ontario facility aimed at providing elevated quality without premium pricing. Looking ahead to 2026, Auxly plans to invest $10 million to $12 million in growth-related capital expenditures to support continued domestic expansion and prepare for direct access to international markets, with management emphasizing that these investments are expected to be funded from operating cash flow while preserving flexibility for shareholder-accretive capital allocation.

The most recent analyst rating on (TSE:XLY) stock is a Hold with a C$0.16 price target. To see the full list of analyst forecasts on Auxly Cannabis Group stock, see the TSE:XLY Stock Forecast page.

Auxly Cannabis Group Reports Robust Q3 2025 Financial Results

Auxly Cannabis Group reported a strong financial performance for the third quarter of 2025, with net revenues increasing by 20% to $39.9 million and a significant rise in net income by 533% to $20.5 million. The company’s strategic focus on product innovation and cost control has resulted in a 48% increase in Adjusted EBITDA, and the repayment of high-interest debt is expected to save approximately $900,000 in annualized interest expenses, positioning Auxly for continued growth and profitability.

Auxly Cannabis Group to Announce Q3 2025 Financial Results

Auxly Cannabis Group Inc. has announced that it will release its financial results for the third quarter of 2025 on November 13, before the markets open. This announcement is significant as it provides stakeholders with insights into the company’s financial performance over the past nine months, potentially impacting investor confidence and market positioning.