Canopy Growth is still a buy, this analyst says

Roth Capital Partners analyst Bill Kirk says Canopy Growth’s (Canopy Growth Stock Quote, Chart, News, Analysts, Financials TSX:WEED) fourth quarter remained on a positive trajectory despite a headline miss, with international growth, Canadian adult-use share gains and MTL Cannabis contributions supporting the path toward positive Adjusted EBITDA.

In a June 16 update, Kirk maintained his “Buy” rating and $5.00 target on Canopy.

Canopy reported fourth-quarter fiscal 2026 revenue of $71.2-million, below consensus at $74.3-million, while Adjusted EBITDA was a loss of $6.3-million, wider than the Street’s forecast for a $3.2-million loss.

Kirk said the quarter was affected by abnormal costs and would have produced a record Adjusted EBITDA result without some of those items. He also noted that Canopy did not issue new shares through its at-the-market program during the quarter.

“We understand investors will be hesitant to underwrite positive EBITDA, an outlook that has been presented since calendar 2020, but MTL contributions, discrete cost savings items, and more international consistency make the outcome more likely,” Kirk said.

Revenue was up 9.6% year-over-year and down 4.7% sequentially. Canadian adult-use sales were $20.4-million, up 1% year-over-year, while Canadian medical sales rose 26% to $22.5-million. International cannabis revenue increased 68% to $8.6-million, while Storz & Bickel revenue declined 14% to $16.8-million.

Kirk said Canopy’s international sales still trail peers, but supply-chain issues have been resolved and the sequential acceleration in the quarter was notable.

Canopy gave rough fiscal 2027 guidance for revenue growth and positive EBITDA “during” the year, despite Canadian medical reimbursement pressure.

The analyst noted that Canadian adult-use share improved to sixth from eighth, driven by category innovation and new products. The company has also realized $6.0-million of a targeted $10.0-million in cost efficiencies tied to MTL public company costs, headcount reductions and facility rationalization.

He said Canopy’s investment thesis continues to rest on a reorganized supply base, better allocation toward profitable demand, international improvement and reduced dilution.

Kirk now forecasts fiscal 2027 revenue of $323.7-million, up from $307.9-million previously, and an Adjusted EBITDA loss of $2.8-million, compared with his previous estimate for a $2.1-million loss.

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