Cannabis companies including Canopy Growth (WEED), CannTrust (CTST), Aphria (APHA), and others (MJ) are expected to report depressed margins due to increased expenses related to investments in future growth. The trend is visible in Tilray’s (TLRY) upcoming earnings. In this part, we’ll discuss analysts’ estimates for Tilray.
As you can see in the above chart, Tilray is expected to report a gross income of $6 million in the fourth quarter—sequential growth from $3 million in the previous quarter. The gross income would translate into an expansion in the company’s gross margin. Tilray’s gross margin is expected to expand sequentially in the fourth quarter to 49% from 31%. While the gross margin is expected to expand, other costs will likely weigh down the company’s core profitability—as determined by the EBITDA.
Tilray is expected to report a negative EBITDA of $8 million in the fourth quarter. The fourth-quarter EBITDA will be better than the negative EBITDA of $18 million in the previous quarter.
Last week, Jefferies gave Tilray an “underperform” rating. The firm’s rating is due to uncertainty about the outlook on medical marijuana and Tilray’s position compared to its peers (MJ).
Next, we’ll discuss analysts’ EPS expectations for Tilray.