One-glance verdict
Overvalued
$2.37 our estimate vs market $3.34
Wall Street consensus: $2.48 (4.5% higher than our fair-value estimate)
41% above our estimate, beyond the bull case
Fundamentals snapshot
Cronos Group Inc.
CRON · NGM · Healthcare · Drug Manufacturers - Specialty & Generic
Current price
$3.34
52-week range
$2.28 - $3.61
Market cap
$1.23B
Balance sheet
Healthy
-1,499.77x Concerning
Net cash $795.72M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 22.2% last year.
- Reward Returns 7.0% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 2/10 years.
What this company does
Cronos Group Inc.
Cronos Group is a cannabis company that makes money by growing and selling products like pre-rolled joints and vaporizers, primarily in Canada and Israel. Its main brands, like Spinach and Lord Jones, compete for customers in a crowded market, so its success depends on building brand loyalty and navigating changing cannabis laws.
How the company got here
Cronos Group was founded in 2012 in Canada and made a name for itself by becoming the first cannabis company to trade on a major U.S. stock exchange, the Nasdaq, in 2018. A major turning point came in 2019 when Altria, the maker of Marlboro cigarettes, invested approximately $1.8 billion, becoming the largest shareholder. This partnership gave Cronos a significant amount of cash and access to Altria's expertise in operating in regulated industries. This financial strength has allowed the company to grow and invest in new products and markets without the same funding pressures faced by many competitors.
What it actually does
Cronos Group is a global company that creates and sells products derived from cannabis. You can think of them as a consumer products company that focuses on cannabinoids (the active compounds in the cannabis plant). They sell a range of items you might see in a dispensary, including dried cannabis flower, pre-rolled joints, vaporizers, and edibles like gummies. The company operates in both the recreational (adult-use) and medical cannabis markets in countries like Canada and Israel.
Cannabis Flower
This is the company's largest business area, making up the majority of its sales. It involves growing and selling the dried flower of the cannabis plant, which is the most traditional form of cannabis. Customers buy this product for both recreational and medical use under brand names like Spinach® and PEACE NATURALS®. The company sells this flower in various formats, including loose buds and pre-rolled joints, primarily to government-run wholesalers and licensed private retailers in Canada.
Cannabis Extracts
This is a smaller but growing part of the business that involves processing the cannabis plant to create concentrated forms, which are then used in other products. This includes things like oils for vaporizers, edible gummies, and other cannabis-infused goods. These products, sold under brands like Lord Jones® and Spinach®, often appeal to customers who prefer not to smoke the flower directly. This segment allows the company to create new and different types of products, such as their SOURZ by Spinach® gummies.
What management is betting on now
The company's leadership is focused on expanding its business outside of the competitive Canadian market, particularly in international medical cannabis markets like Israel and Germany. They are also investing heavily in research and development (R&D, the process of creating new products and improving existing ones) to create unique and innovative products, such as edibles with rare cannabinoids. A key part of their strategy is to build strong, recognizable consumer brands like Spinach®. Management believes its strong balance sheet (a statement of what a company owns and owes) provides a key advantage, allowing it to fund growth and new product development patiently.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$5.17M
FY2024 Q4
$4.18M
FY2025 Q1
$-17.35M
FY2025 Q2
$-1.02M
FY2025 Q3
$8.83M
FY2025 Q4
$9.70M
FY2026 Q1
$9.02M
FY2026 Q2
$22.27M
Revenue
$53.01M
Net income
$32.09M
Diluted EPS
0.09
Operating cash flow
$24.01M
Free cash flow
$22.27M
Fetching…
Sources
Revenue
$45.21M
Net income
$13.75M
Diluted EPS
0.04
Operating cash flow
$10.90M
Free cash flow
$9.02M
Fetching…
Sources
Revenue
$44.53M
Net income
$-1.82M
Diluted EPS
-0.01
Operating cash flow
$11.84M
Free cash flow
$9.70M
Fetching…
Sources
Revenue
$36.34M
Net income
$25.96M
Diluted EPS
0.07
Operating cash flow
$13.31M
Free cash flow
$8.83M
Fetching…
Sources
Revenue
$33.45M
Net income
$-39.71M
Diluted EPS
-0.10
Operating cash flow
$2.82M
Free cash flow
$-1.02M
Fetching…
Sources
Revenue
$32.26M
Net income
$6.12M
Diluted EPS
0.02
Operating cash flow
$-2.10M
Free cash flow
$-17.35M
Fetching…
Sources
Revenue
$30.30M
Net income
$43.73M
Diluted EPS
0.12
Operating cash flow
$7.72M
Free cash flow
$4.18M
Fetching…
Sources
Revenue
$34.26M
Net income
$8.35M
Diluted EPS
0.02
Operating cash flow
$11.58M
Free cash flow
$5.17M
Fetching…
Sources
Is it cheap or expensive?
Fair value $2.37 vs current price $3.34
Wall Street consensus is the average analyst price target: $2.48 (4.5% higher than our fair-value estimate).
Our most-likely fair value is $2.37 a share — about 28.9% below today's price of $3.34, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $795.7M - more cash than debt. Interest coverage -1499.8x.
Net debt
$-795.72M
Interest coverage
-1,499.77x
Cronos Group Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 5 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
CRON
BASELINE
Cronos Group Inc.
Total debt $1.29M Interest coverage -1,499.77x This is the baseline the peer rows are being compared against.
Total debt $398.40M Interest coverage -1.85x Neither company has much profit cushion over interest right now.
Total debt $196.12M Interest coverage -1.91x Neither company has much profit cushion over interest right now.
Total debt $117.66M Interest coverage -0.59x Neither company has much profit cushion over interest right now.
Total debt $16.04M Interest coverage -25.79x Neither company has much profit cushion over interest right now.
Total debt $22.38M Interest coverage -35.66x Neither company has much profit cushion over interest right now.
What you should know
The case for and against CRON
3 Rewards
0 Risks
Rewards
-
Revenue grew 22.2% last year.
-
Returns 7.0% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 2/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
17.58x
Forward P/E
-83.50x
P/B
1.16x
P/S
6.87x
EV/EBITDA
40.71x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
43.0%
Operating margin
15.4%
Net margin
39.1%
ROE
7.0%
ROA
-0.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.00x
Current ratio
16.18x
Quick ratio
15.15x
Total debt
$1.29M
Total cash
$797.02M
Growth
How the business has been compounding
Revenue TTM
$179.09M
Revenue 5Y CAGR
22.8%
EPS TTM
0.19
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$60.05M
Free CF TTM
$149.00K
FCF margin
0.1%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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