Canopy Growth Stock Dips Despite Surprise Profit

The security sports a 25% year-to-date deficit

Assistant Editor
Aug 6, 2021 at 10:18 AM
facebook twitter linkedin

The shares of Canopy Growth Corp (NASDAQ:CGC) are down 2.5%% to trade at $18.66 at last check, despite the cannabis name reporting a surprise fiscal first-quarter profit, driven by lower costs and strengthening demand for marijuana. Putting pressure on the equity instead is the company's revenue, which just missed analysts' projections.

On the charts, long term support at the $18 level remains in place, though former support from the 200-day moving average is well overhead. Meanwhile, Canopy Growth stock is heading for its fifth weekly loss in six, and today's negative price action adds to its 25% year-to-date deficit.

Analysts are still very much hesitant towards the stock. Of the 13 in coverage, 10 carry a lukewarm "hold" or worse rating. Meanwhile, the equity's 12-month consensus target price of $26.97 is a whopping 47.5% premium to current levels.

Short interest rose ahead of the event, adding 6.4% in the two most recent reporting periods. Now, the 18.17 million shares sold short make up a healthy 7.4% of CGC's available float, or over a week's worth of pent-up buying power. 

Drilling down to today's options activity, 14,000 puts and 14,000 calls have crossed the tape so far, which is 12 times what is typically seen at this point. Most popular is the August 18 put, followed by the 19.50 call from the same series. 

Begin the New Year With Schaeffer's 7 FREE 2022 Stock Picks!



Special Offers from Schaeffer's Trading Partners