June 1 is a big day for Canopy Growth (TSX:WEED)(NASDAQ:CGC) investors. The company is releasing its year-end results for fiscal 2021, before the markets open the day.
The past year has been a tumultuous one for the Canadian pot producer. Although it is up over 30% in 12 months, that's after a significant sell off of late. The stock soared when Americans elected Joe Biden to be their next president in November 2020. Hype that marijuana might soon be legalized got investors overly bullish on Canopy Growth and other Canadian pot stocks. But the reality is Biden has never said he would legalize marijuana, only going so far as to talk about decriminalizing it.
Now that the hype has died down, Canopy Growth is trading at a lower price. But with a price-to-sales multiple of around 25, it is still at a much heftier multiple than rival Tilray (NASDAQ:TLRY), which is trading at less than half that premium.
A year ago, Canopy Growth reported a net loss of $1.4 billion for fiscal 2020 on revenue of $399 million. On that day, its shares would fall more than 20%. The company, unfortunately, doesn't have the greatest track record when it comes to impressing investors on earnings day.
And that's why this isn't a stock I would gamble on heading into earnings. It can be very volatile and with the hype in the sector softening of late, even a positive result may not be enough to generate much of a bump up in the company's share price.
