Cronos reported a surprise profit for its second quarter
Canada-based Cronos Group Inc (NASDAQ:CRON) joined this week's earnings parade, posting a surprise second-quarter profit and revenue that beat expectations. What's more, the company said cannabis sales tripled during the last quarter, thanks to last year's legalization of recreational marijuana use in Canada, and it expects the U.S. market to be big over the next couple of years. CRON stock is now up 7.4% at $15.50, eyeing its fourth consecutive win today.
What's more, CRON is on course to close back atop its 80-day moving average for the first time since early April. Looking more broadly, CRON has been in cool-down mode over the past couple of months. However, the $13 region has acted as a springboard of late, with Cronos already up more than 20% off last week's seven-month low of $12.70.
While analysts have been quiet today, there's plenty of room for a round of upgrades to push CRON higher. Right now, only two call the stock a "strong buy," while eight say it's a "hold" or worse. Plus, its consensus 12-month price target of $14.66 is now at a slight discount to current levels.
An unwinding of shorts could help propel the security too, should CRON keep rallying. In the last two reporting periods, short interest rose 14.4%. These 37.66 million shares sold short now represent a hefty 21.4% of the stock's available float, or eight days of buying power, at the equity's average pace of trading.