Should You Buy Canopy Growth Stock Ahead of Earnings?

Canopy Growth Corp (TSX:WEED)(NYSE:CGC) releases its first-quarter results of fiscal 2021 on Monday, August 10. The company's coming off a brutal end to fiscal 2020 where it incurred a net loss of $1.3 billion in the fourth quarter, largely to due to impairment and restructuring expenses.

However, it's unlikely that things will get much better for Canopy Growth in Q1 as CEO David Klein's referred to this new fiscal year as a "transition year" for the company which will likely mean there's some more pain to come for shareholders before things eventually get better.

The company's been shedding costs by laying off staff, closing facilities and pulling out of some international markets. And so while the pot producer may make strides in getting closer to breakeven, it may come at the cost of losing some revenue growth along the way.

Rival Aphria Inc (TSX:APHA)(NYSE:APHA) recently reported its quarterly earnings and its sales were up just 5% from its previous quarter even though cannabis sales have been rising in Canada amid the pandemic. And given that Canopy Growth's focus has been on squeezing out a profit as opposed to focusing on revenue growth, I wouldn't expect a strong top number from the cannabis producer in Q1.

With shares of Canopy Growth currently trading at more than 20 times revenue, the stock's also not a cheap buy right now. If you want to buy shares of Canopy Growth, it might be a good idea to wait until after the company releases its quarterly results.