The cannabis company is highly affordable and has the potential to deliver outstanding returns
Cheap or undervalued stocks are publicly traded companies that are priced below their fair value and therefore have upside potential. Identifying such companies in the marijuana industry has long been the primary goal of many investors. This strategy is one that many investors have been pursuing since the stock market euphoria of the months of 2020. While macroeconomic conditions remain challenging, there are cannabis stocks below $10 that can be value creators. One of these is Cronos.
This firm’s stock has been depressed like many stocks in the marijuana market. This is because the markets are discounting a slower growth trajectory for the industry. While this may sound a bit discouraging, the reality is that Cronos shares appear to be quite attractive, especially after a nearly 60% correction in 12 months.
It is no secret to anyone that state legalization and federal reform talks remain a looming catalysts. Last year, Cronos posted revenue growth of 59% to $74.4 million. While it is true that adjusted EBITDA losses had some widening, the company has continued to expand its footprint in Israel and the US. It is possible that a similar move will begin to be seen in the European market in the coming years.
The fact that the addressable market is sustaining an expansion means that the company is in a strong position to maintain a growth trajectory. It is also worth noting that Cronos reported cash equivalents of $887 million for 2021.
Given the company’s strong brand portfolio and financial flexibility, many investors should be paying attention to Cronos stock. Experts indicate that a rebound from oversold levels is likely.