Cronos Group (NASDAQ:CRON) Posts Earnings Results, Beats Estimates By $0.01 EPS

Key Points

• Cronos Group reported Q3 EPS of $0.04, beating analyst estimates of $0.03. Revenue rose 75% year over year to a record $63.5 million, with record Adjusted EBITDA of $17.1 million.
• Canadian brand retail sales grew 41%, far outpacing 1% industry growth; Israel revenue rose 33%, while international sales outside Israel increased sevenfold to $13.2 million, led by Germany.
• Cronos ended the quarter with $841 million in cash, investments, and deposits, but management flagged potential Q4 softness in Canadian provincial-board purchases and uneven international sales due to export timing.

Cronos Group (NASDAQ:CRON - Get Free Report) announced its quarterly earnings data on Thursday. The company reported $0.04 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.03 by $0.01, Zacks reports. Cronos Group had a return on equity of 4.85% and a net margin of 39.08%.

Here are the key takeaways from Cronos Group's conference call:

• Cronos reported record Q3 net revenue, gross profit, and Adjusted EBITDA: revenue rose 75% year over year to $63.5 million, while Adjusted EBITDA reached $17.1 million.
• Canadian brands grew retail sales 41% year over year, versus 1% industry growth, with Spinach gaining share across vapes, flower, and pre-rolls; SOURZ remained the leading edible brand.
• Israel delivered its 11th consecutive quarter of record revenue, up 33%, and revenue in international markets outside Israel increased sevenfold to $13.2 million, led by Germany. Management cautioned that export timing can make international sales uneven from quarter to quarter.
• Cronos completed its CanAdelaar acquisition in the Netherlands, seeing long-term potential in introducing branded products and improving operations. Management expects price compression as supply ramps up and said expansion of the regulated experiment is possible but not something it is relying on.
• The company ended the quarter with $841 million in cash, restricted cash, investments, and deposits, up $14 million from Q2. Management noted possible Q4 softness in Canadian provincial-board purchases and said margins can vary by quarter.

Cronos Group Price Performance

Shares of NASDAQ:CRON traded up $0.20 during midday trading on Thursday, hitting $3.71. 3,962,486 shares of the company's stock were exchanged, compared to its average volume of 899,354. Cronos Group has a 12 month low of $2.28 and a 12 month high of $3.91. The company has a market cap of $1.36 billion, a PE ratio of 31.91 and a beta of 0.96. The stock has a 50 day moving average price of $3.30 and a 200-day moving average price of $2.87.

Analysts Set New Price Targets

Several research analysts have issued reports on CRON shares. Wall Street Zen lowered Cronos Group from a "buy" rating to a "hold" rating in a report on Saturday, August 15th. Zacks Research upgraded Cronos Group from a "hold" rating to a "strong-buy" rating in a report on Thursday, October 22nd. TD Securities reaffirmed a "buy" rating on shares of Cronos Group in a research report on Monday, September 28th. Finally, Weiss Ratings raised Cronos Group from a "buy (b-)" rating to a "buy (b)" rating in a research report on Thursday, October 8th. One equities research analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and one has issued a Hold rating to the company. Based on data from MarketBeat.com, Cronos Group presently has a consensus rating of "Buy" and a consensus target price of $2.30.

About Cronos Group

Cronos Group Inc is a Canadian cannabinoid company focused on developing, producing and commercializing cannabis and cannabis-derived consumer products. The company serves adult-use and medical cannabis markets through a portfolio of brands and sells products such as dried flower, pre-rolls, vaporizers, edibles, oils and other cannabis formats, subject to applicable regulations.

Its brand portfolio has included Spinach, which is positioned primarily in the adult-use cannabis market, as well as Lord Jones and PEACE NATURALS.

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