Is Canopy Growth (TSX:WEED) a buy right now?

Roth Capital Partners analyst Bill Kirk says Canopy Growth’s (Canopy Growth Stock Quote, Chart, News, Analysts, Financials TSX:WEED) fiscal Q1 results showed a clearer path toward positive Adjusted EBITDA despite medical reimbursement pressure in Canada.

In an Aug. 10 update, Kirk reiterated his “Buy” rating and $5.00 target on Canopy.

“We look for further margin expansion and greater international contribution than 1Q,” Kirk said.

Canopy reported fiscal Q1 revenue of $81.2-million, slightly below consensus at $82.7-million but up 9.6% year-over-year. Adjusted EBITDA was negative $3.2-million, ahead of Kirk’s negative $3.1-million forecast and improved from negative $7.9-million a year earlier.

Kirk said Canopy would have generated about $2-million of positive Adjusted EBITDA under the previous Canadian medical reimbursement structure, which would have been its first Adjusted EBITDA-positive quarter.

Canadian adult-use revenue was $29.7-million, up 10% year-over-year and 44% sequentially. Canadian medical revenue was $22.5-million, up 22% year-over-year, while international cannabis revenue rose 9% to $8.6-million. Storz & Bickel revenue increased 6.5% to $16.1-million.

Consolidated adjusted gross margin improved to 31% from 25% a year earlier. Cannabis gross margin was 26%, while Storz & Bickel gross margin rose to 48%, helped partly by tariff refunds.

Kirk said Canopy’s international sales still trail peers, but should improve as supply-chain issues ease. Europe remains a key growth opportunity, with Canopy becoming a top-three supplier in Poland and preparing to begin flower shipments to the U.K.

The company has realized $8-million of its targeted $10-million of cost synergies from MTL, including public company costs, headcount reductions and facility rationalization.

Kirk said Canopy’s EU-GMP capabilities at Smiths Falls could make it one of the few companies with end-to-end EU-GMP production for international markets.

He also noted that Canopy did not issue shares through its at-the-market program in Q4 fiscal 2026 or Q1 fiscal 2027, after heavy use earlier in fiscal 2026.

Canopy continues to expect fiscal 2027 revenue growth and positive Adjusted EBITDA during the year.

For fiscal Q2, Kirk now forecasts revenue of $81.2-million and Adjusted EBITDA of negative $2.4-million. For fiscal 2027, he expects revenue of $327.6-million and Adjusted EBITDA of negative $2.1-million.

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