Why Canopy Growth Stock Crashed on Friday

Core Viewpoint - Canopy Growth's stock has significantly declined following a substantial earnings miss, leading to a recommendation to consider selling the stock [1][5]. Group 1: Earnings Performance - Canopy Growth reported a loss of $1.32 per share for Q4 of fiscal 2025, which was much worse than the anticipated loss of $0.20 per share [1]. - Globally, Canopy's sales fell by 11% in Q4, and for the full year, sales were down 9% [5]. - Free cash flow for Q4 was negative $36.2 million, and for the full year, it was negative $176.6 million [5]. Group 2: Management Commentary - Canopy's management highlighted a 4% year-over-year growth in Canadian sales and a 13% growth in Canadian medical cannabis sales [3]. - CEO Luc Mongeau mentioned efforts to unify global medical cannabis businesses to accelerate growth and profitability [3]. - The company has made improvements in Adjusted EBITDA and cash flow but has not yet achieved positive Adjusted EBITDA or Free Cash Flow [4]. Group 3: Market Sentiment - Investors reacted negatively to the earnings report, indicating a lack of confidence in the company's current trajectory [2]. - Despite some positive metrics, the overall trend in sales growth remains negative, raising concerns about the company's future performance [6].