Buy Canopy Growth Corporation Stock EXCLUSIVE
Zacks' proprietary data indicates that Canopy Growth Corporation is currently rated as a Zacks Rank 3 and we are expecting an inline return from the CGC shares relative to the market in the next few months. In addition, Canopy Growth Corporation has a VGM Score of D (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style). Valuation metrics show that Canopy Growth Corporation may be overvalued. Its Value Score of F indicates it would be a bad pick for value investors. The financial health and growth prospects of CGC, demonstrate its potential to underperform the market. It currently has a Growth Score of D. Recent price changes and earnings estimate revisions indicate this would be a good stock for momentum investors with a Momentum Score of A.
buy canopy growth corporation stock
Conventional wisdom says that a PEG ratio of 1 or less is considered good (at par or undervalued to its growth rate). A value greater than 1, in general, is not as good (overvalued to its growth rate). For example, a company with a P/E ratio of 25 and a growth rate of 20% would have a PEG ratio of 1.25 (25 / 20 = 1.25). A company with a P/E ratio of 40 and a growth rate of 50% would have a PEG ratio of 0.80 (40 / 50 = 0.80). Traditionally, investors would look at the stock with the lower P/E and deem it a bargain. But when compared to its growth rate, it does't have the earnings growth to justify its P/E. In this example, the one with the P/E of 40 is the better bargain because it is selling at a discount to its growth rate. So the PEG ratio tells you what you're paying for each unit of earnings growth.
A stock with a P/E ratio of 20, for example, is said to be trading at 20 times its annual earnings. In general, a lower number or multiple is usually considered better that a higher one. Value investors will typically look for stocks with P/E ratios under 20, while growth investors and momentum investors are often willing to pay much more. Aside from using absolute numbers, however, you can also find value by comparing the P/E ratio to its relevant industry and its peers.
Cash is vital to a company in order to finance operations, invest in the business, pay expenses, etc. Since cash can't be manipulated like earnings can, it's a preferred metric for analysts. Using this item along with the 'Current Cash Flow Growth Rate' (in the Growth category above), and the 'Price to Cash Flow ratio' (several items above in this same Value category), will give you a well-rounded indication of the amount of cash they are generating, the rate of their cash flow growth, and the stock price relative to its cash flow.
While earnings are the driving metric behind stock prices, there wouldn't be any earnings to calculate if there weren't any sales to begin with. Like earnings, a higher growth rate is better than a lower growth rate. Seeing a company's projected sales growth instantly tells you what the outlook is for their products and services. As a point of reference, over the last 10 years, the median sales growth for the stocks in the S&P 500 was 14%. Of course, different industries will have different growth rates that are considered good. So be sure to compare a stock to its industry's growth rate when sizing up stocks from different groups.
Leading up to legalization, investors were excited about the potential that the cannabis market would offer. However, despite years of legalization now, many of these companies in the industry, including one of the industry leaders, Canopy Growth (TSX:WEED)(NASDAQ:CGC), have struggled to turn a profit. But as the industry continues to consolidate, and WEED stock trades mighty cheap right now, is Canopy the best growth stock to buy for 2022?
There are several high-potential Canadian stocks to buy in 2022, but in my opinion, considering the risk to reward, Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) is the best growth stock to buy this year.
The U.S. cannabis industry is estimated to have a TAM (total addressable market) of more than $50 billion. This presents a huge opportunity for the cannabis stock. Canopy growth will potentially hold the leading market share in the U.S. upon federal approval and unlock significant value for its shareholders.