Cronos Group (CRON) stock forecast: the downtrend continues

The Cronos share price in 2021 has declined significantly from its February highs, currently  trading at $4.93 (22 November), 68% below its $15.8 a share peak.  

However, news about bipartisan support for the legalisation of marijuana contributed to pushing the stock higher in the past few days after South Carolina’s Rep. Nancy Mace introduced the States Reform Act – a bill that seeks to decriminalise cannabis, while regulating it similarly to alcohol.

“We’re hearing great feedback from both chambers from both sides of the aisle on this piece of legislation because it is a go-between, a turnkey piece of legislation that is a compromise between what has been filed previously on both sides of the aisle,” said Mace during a press-conference concerning the presentation of the bill.

This bill would seek to allow companies to access funding, banking services and other regular business platforms that they have been banned from.

In this context, what can be expected from the Cronos Group stock in the future? Join us in this CRON stock price prediction as we take a closer look at the variables influencing the market’s sentiment toward this marijuana stock.

Cronos Group stock news

She added: “This is why I’m introducing the States Reform Act, a bill which seeks to remove cannabis from Schedule I in a manner consistent with the rights of states to determine what level of cannabis reform each state already has, or not.” 

These are some of the most relevant aspects of the bill presented by Rep. Mace:

• States will ultimately decide if they will prohibit or regulate the use of cannabis and other similar substances. On a federal level, the commercialisation of the substance will be taken out of Schedule I.

• Cannabis will be regulated similarly to alcohol.

• A 3% excise tax will be imposed on cannabis products to fund law enforcement and other initiatives.

• Medical cannabis programs will be protected and the same goes for the medical uses for the drug.

• Individuals who have been convicted of nonviolent cannabis-only related offenses will be released.

In other news, the Cronos Group informed investors that it will be reporting at least $220m in impairment charges on its goodwill and intangible assets as part of its financial report covering the three and six months ended on 30 September. 

The company was unable to file its latest 10-Q report, citing that it required additional time to fully evaluate the amount of the impairment. It assured investors that this restatement will not have a material effect on its cash, cash equivalents and revenue accounts.

However, the management stated that it cannot assure investors that it will be able to complete this assessment within the next 60 days.

The company also stated that it applied for a management cease trade order (MCTO) with Canadian authorities. Such an order prevents top officers from trading the company’s securities (stocks, bonds, warrants, etc.) until the aforementioned filings are completed. The MCTO has not been granted yet and there are no guarantees that it will. 

CRON stock analysis: technical view

The past few sessions have been a bit volatile for shares in Cronos Group – the stock went up 26% on 8 November amid news that Congress was moving forward with the legalisation of cannabis in the US, while the 9 November report in regards to the company’s inability to file its 10-Q report timely prompted a 15% decline in the Cronos Group stock value.

The price has failed to hold its ground and it is currently moving below its short-term moving averages after it briefly broke above them earlier in the month.

That said, momentum indicators are posting bullish divergences, meaning that they have started to move higher despite the price moving lower.

Overall, this recent volatility is making it difficult to determine which direction Cronos Group stock may take. For now, unless the stock decisively reverses the downward price channel highlighted in the chart, the current setup keeps pointing to a bearish Cronos Group stock prediction.

This is an opinion drafted after assessing the stock’s technical situation. It does not constitute a recommendation to buy or sell the stock. 

CRON fundamental analysis

The last time Cronos Group filed a quarterly earnings report was on 5 August. Back then, the company reported net revenues of $28.23m for the six months ended on 30 September, resulting in a 54% year-on-year jump. 

Gross losses landed at $18.7m, while net losses accelerated to $104.85m over the same period compared to $32.02m the company had shed during the first six months of 2020.

During the first six months of 2021, the company burned $182.84m in cash, as indicated by its cash flow statement. This compares to the $90m it burned during the first six months of 2020. Its cash balance ended the period to 30 June at $895.18m. 

The total market capitalisation of the Cronos Group currently stands at $1.83bn, according to CompaniesMarketCap as of 22 November 2021.

Cronos Group (CRON) stock forecast: analyst sentiment

Based on the technical analysis outlined above, other technical pointers and price trends, the outlook for Cronos stock appears to be bearish.

In a broader context, Capital.com analyst Mikhail Karkhalev, outlined some warning signs, which might affect the Cronos Group share price performance:

Cronos stock forecast 2022-2025: CRON stock price targets

Is the CRON stock a ‘buy’, ‘sell’, or ‘hold’? Data from Seeking Alpha indicates that 7 out of the 14 analysts that are currently covering the stock have a neutral rating on CRON, while 4 others have rated the stock a sell with a mix of ‘bearish’ and ‘very  bearish’ views. Three analysts shared ‘bullish’ and ‘very bullish’ ratings.

The average price target stands at $7.05 a share, while the highest CRON stock price target stands at $10.97, as of 22 November 2021.

According to Market Beat’s CRON stock forecast, as of 22 November, the consensus price target for the next 12 months stands at $8.17. The highest target was $12.50, while the lowest was $5.00.

The rating on the stock is a ‘hold, according to the consensus of 6 analysts. Of this number, one has a ‘buy’ recommendation, two rate it as ‘hold’ and three are down as ‘sell’.

According to the latest analyst coverage as of 18 November 2021, Bank of America and Barclays rated the CRON stock as ‘underperform’ and ‘underweight’ with price targets of $5.00 and $5.50, respectively.

Meanwhile, the following is a compilation of Cronos stock forecasts 2022-2025 from algorithm-based forecasting services, as of 22 November 2021.

Wallet Investor estimates that the price of Cronos stock is “a not so good long-term (one year) investment” and could hit $4.95 over the next 12 months.

The calculations also suggest that the stock could gradually increase to $5.90 by the end of December 2022 and decrease to $4.62 in December 2023. Wallet Investor’s CRON share price forecast expects the price to hit $2.49 by the end of 2025. 

Although the service does not provide longer term price targets for 2030, the stock might fall to $0.04 over the five years to the end of December 2026. 

Finally, Gov Capital shares a more optimistic Cronos Group stock forecast (as of 22 November). It estimated that the price of the Cronos Group stock should close this year at $5.74 a share, possibly moving to around $13.93 a share by the end of 2022. 

When looking for Cronos Group stock predictions, it’s important to bear in mind that analysts’ forecasts can be wrong. Analysts’ projections are based on making a fundamental and technical study of a stock’s performance. Past performance is no guarantee of future results. 

It’s important to do your own research and always remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never invest money that you cannot afford to lose.

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