CronosCronos Group Inc. (NASDAQ: CRON) is one of the oldest and most popular cannabis stocks on the market. It has been historically volatile, but some signs indicate that it could move towards stability. Find out if this bargain alternative pick is portfolio-worthy.

Cronos, like many of its industry peers, has generated strong revenue growth over the previous five fiscal years. From total revenue of $226,589 in 2015, the company reported $31.5 million in revenue at the end of the 2019 fiscal year. It was a year over year increase of 100.59%, and it reflects the high potential for sales growth that exists throughout the cannabis industry.

While it’s a strong revenue performer, Cronos is far from profitable. It ended last year with a gross margin of -84.06% and an EBITDA margin of -472.60%. Rising costs and production shortfalls hurt the bottom line. However, this is likely to change, with the most optimistic analysts predicting that output will pick up in the coming months. The highest estimates see sales growth of up to 120% within 12 months.

Steadily growing revenue will push the EBITDA margin towards a positive figure. The consensus is that this company will become profitable by the end of 2021. Cannabis is now legal for medical use in 33 states and legal for recreational use in 11. The movement for federal legalization is growing. Cronos might not be the most profitable cannabis pick today, but for its growth trajectory and long-term potential in a rapidly growing consumer and medical market, it’s potential can’t be ignored.

Key Data:

  • 1 Year Price Growth: -54.87%
  • YTD Price Growth: -13.56%
  • 3 Month Price Growth: 23%

All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.