Discounted Cash Flow Calculation for TSX:CRON using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
TSX:CRON DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Cronos Group's earnings available for a low price, and how does
this compare to other companies in the same industry?
Cronos Group's earnings are expected to grow significantly at over 20% yearly.
Cronos Group's revenue is expected to grow significantly at over 20% yearly.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Cronos Group's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Michael Gorenstein, also known as Mike, J.D., has been the President since May 16, 2016 and Chief Executive Officer since May 13, 2016 at Cronos Group Inc. and previously served as its Corporate Secretary since May 16, 2016. Mr. Gorenstein served as a Partner at Alphabet Ventures LLC from June 2015 to June 2017. Prior to this, Mr. Gorenstein served as Principal, Vice President and General Counsel at Saiers Capital LLC (f/k/a Alphabet Management, LLC) from January 2015 to June 2015. He was a Corporate Attorney at Sullivan & Cromwell, where he focused on Mergers and Acquisitions and Capital Market transactions and was an Associate from October 2011 to December 2015. He serves as the Chairman of Cronos Group Inc. and has been its Director since November 06, 2015 and previously served as its Vice Chairman. He is also a Co-founder and Member of Gotham Green Partners GP since June 2017. Mr. Gorenstein graduated from the University of Pennsylvania Law School with a JD, the Wharton School at University of Pennsylvania with a certificate in Business Economics and Public Policy and the Kelley School of Business at Indiana University with a BSB in Finance.
Mike's compensation has increased whilst company is loss making.
Mike's remuneration is lower than average for companies of similar size in Canada.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the Cronos Group management team is less than 2 years, this suggests a new team.
Chief Operating Officer
General Counsel & Corporate Secretary
Head of Sales & Business Development
Chief Commercial Officer
Chief Financial Officer
Head of Investor Relations & Communications
Head of Marketing
Vice President of Finance
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Cronos Group board of directors is less than 3 years, this suggests a new board.
Board of Directors
Who owns this company?
Recent Insider Trading
Cronos Group insiders have only sold shares in the past 3 months.
Is Cronos Group Inc's (TSE:CRON) Balance Sheet Strong Enough To Weather A Storm?
Cronos Group Inc (TSE:CRON) is a small-cap stock with a market capitalization of CA$1.60b. … While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. … Assessing first and foremost the financial health is
Cronos Group Inc., formerly known as PharmaCan Capital Corp., is a principal investment firm. The firm seeks to invest in companies either licensed, or actively seeking a license, to produce medical marijuana pursuant to Canada’s Marihuana for Medical Purposes Regulations “MMPR”. The firm typically invests in companies based in Canada. The firm is primarily an equity investor, may also advance debt as appropriate. It seeks to make minority investments with appropriate governance and shareholder rights. The firm seeks board representation consistent with the size of the investment, but does not need control. Cronos Group Inc. was incorporated in January, 2013 and is based in Toronto, Canada with an additional office in Toronto, Canada.
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