Should Investors Abandon Canopy Growth After Its Q2 Earnings?
The marijuana boom amid the pandemic benefited the U.S. cannabis companies. Sales also jumped in Canada, but some external headwinds (like lockdowns in certain provinces and lack of legal stores) challenged the revenue of Canadian cannabis companies. The slow pace of revenue growth is also delaying these companies in achieving positive earnings before interest, tax, depreciation, and amortization (EBITDA).
Despite multiple attempts, Canadian cannabis companies are struggling to be profitable. While investors were eagerly waiting for some turnaround, Canopy Growth (NASDAQ: CGC), a popular name in the cannabis space, disappointed with its second-quarter earnings (ended September 30). So far this year, its stock is down 47% compared to the industry benchmark, the Horizons Marijuana Life Sciences ETF's gain of 4%.
Let's dive into its Q2 results and determine whether investors should/shouldn't give up on this pot stock.
Source Fool.com
