Analyst Note| Kristoffer Inton |
On an absolute basis, Canopy’s fiscal third-quarter results weren’t very good, with sales down 8% and adjusted EBITDA down 1% over the prior-year quarter despite contributions from acquisition. On a relative basis, these results were better than last quarter, when adjusted EBITDA losses nearly doubled over the prior year, tracking our forecast for lower overhead spending. But the revenue recovery is slower than we had anticipated, leading us to cut our fair value estimates to $20 and CAD 25 per share, down from $22 and CAD 27. Our no-moat rating remains unchanged as positive returns on invested capital remain years away.