Tilray (TLRY) has frequently been in the news lately for a variety of reasons. The company is working on expanding its exports to European markets through a GMP-certified facility. Despite the company’s efforts, its stock has continued to fall for the last month. It’s currently trading at $17.31.
Highlights of Tilray’s financials and estimates
For the third quarter, Tilray recorded $55.1 million in revenue, 10% more than analysts’ consensus estimate. However, the company missed estimates on the EBITDA and net profit fronts. It recorded -$23.5 million in adjusted EBITDA and -$35.7 million in net revenue, implying falls of 20.7% and 25%, respectively, from the estimates.
As per a recent CNBC interview with CEO Brendan Kennedy, he believes the company will be EBITDA positive in the fourth quarter of 2020. He also said the company’s export plans to European markets from its Portugal facility would make it profitable in 2020 and 2021. However, analysts’ forecasts suggest that the company will not be profitable for the next few years.
Analysts’ recommendations and target price
Currently, Tilray stock is covered by 17 analysts. The number of analysts covering the stock has increased from just 11 to 17 in the last six months. The majority of analysts recommend “holds” on the stock. Only one recommends a “strong buy,” and three recommend “buys.”
Tilray’s consensus target price has been plummeting in the last few months. With the company’s share price briefly falling below its IPO price, the fall in analysts’ target price isn’t surprising. Currently, Tilray’s consensus target price is around $29, which is 67% higher than its current trading price of $17.31.
Tilray’s updates for the last month
The last month has been a happening one for Tilray. It appointed Katy Dickson as Manitoba Harvest president to focus on expanding its hemp product offerings. The company also received its second GMP certification for its Portugal facility. This certificate permits the company to export pharmaceutical-grade cannabis products for medical use to the European market. The company also closed on its merger with Privateer Holdings.
In line with its expansion strategy into European markets, Tilray exported its first shipment of medical cannabis extracts to Switzerland. This agreement marked the company’s 14th supply agreement. The company is focusing on improving its product line of exports and expanding its European market presence. It’s also being sued for $300 million by Trimax, a soap company. Trimax claims that Tilray is trying to buy its subsidiaries for lower valuations by bankrupting it.
Tilray’s stock price has been tumbling for a long time. It’s lost almost 75% of its value YTD (year-to-date). Tilray’s share price reached its 52-week low of $16.92, which was lower than its IPO price, on December 19. It’s fallen almost 13% since the start of this month.
Tilray’s share price soared to $244 in September 2018. However, the stock is currently trading at $17.31 in sharp contrast to its performance last year. This declining trend is common among cannabis companies.
Tilray versus its peers
Along with their disappointing earnings reports, most cannabis giants are also facing lawsuits for different reasons. Canopy Growth (CGC) (WEED) faced a lawsuit last month for possible misleading statements regarding pricing adjustments. Canopy stock is down 35% YTD. Another cannabis giant, Aurora Cannabis (ACB) (ACB.TO), is also facing three securities lawsuits. The company’s stock lost almost 60% of its value this year.