What Do Analysts Think about Tilray after Its Q1 Results?

Tilray (NASDAQ:TLRY) posted its first-quarter earnings on May 11. The revenue growth was impressive in the first quarter. Notably, the company’s adult-use cannabis sales and medical sales in Canada and international markets showed tremendous growth in the quarter. However, the net losses widened to $112.1 million in the quarter. Tilray also recorded another quarter of negative EBITDA. Let’s see what analysts said about Tilray after the earnings.

Tilray’s Q1 revenue grew, net loss widened

Tilray reported first-quarter revenue of $52.1 million, which was higher than analysts’ estimate of $50.8 million. The revenue increased 126% year-over-year from $23.0 million in the first quarter of 2019. Sequentially, the revenue increased from $46.9 million in the fourth quarter. The EBITDA loss for the quarter was around $19.6 million—much lower than analysts’ estimate of $24.8 million. Also, the EBITDA was higher than in the first quarter of 2019. The losses decreased from $35.3 million in the fourth quarter of fiscal 2019. Tilray ended the quarter with cash and cash equivalents of $174 million. To learn more, read Tilray Posts Q1 Results, Stock Falls, and Net Losses Widen.

Tilray hopes to achieve positive profitability by the fourth quarter of fiscal 2020. Analysts expect the same by the second quarter of fiscal 2021. They expect the company’s revenue to slowly rise over the next quarters and the EBITDA loss to decline. After the earnings, analysts kept the revenue estimate of $238 million for fiscal 2020. The EBITDA losses also could be lower. Now, analysts expect an EBITDA loss of $60 million for fiscal 2020 compared to $75 million in April.

Analysts cut Tilray’s target price

Cowen and Company cut the target price to $9 from $15. Benchmark cut the target price to $14 from $28. Eight Capital cut the target price to $9 from $17, while Stifel increased the target price to $6.5 from $5.5. Alliance Global Partners cut the target price to $9 from $15. Meanwhile, Jefferies raised the target price for the stock to $6 from $5.

Currently, 16 analysts cover Tilray stock. Among the analysts, 12 recommend a “hold,” two recommend a “buy,” one recommends a “sell,” and one recommends a “strong sell.” The average target price on the stock is $8.35, which represents an upside potential of 5% from its last closing price on May 18. The stock closed higher by 2.4% at $7.96 on May 18.

Analysts also cut the target price for Aurora Cannabis after its third-quarter results. Aurora Cannabis managed to beat revenue estimates but reported EBITDA loss again. Meanwhile, Curaleaf reported a mixed first quarter.

Aurora Cannabis stock has a majority “hold” rating. The average target price is 13.12 Canadian dollars. Analysts have a bullish recommendation for Curaleaf with an average target price of $11.65.

Stock performance

May looks good for cannabis stocks. After Aurora Cannabis (NYSE:ACB) and Green Thumb Industries’ (OTCMKTS:GTBIF) revenue growth in the first quarter, marijuana stocks have been soaring. Aurora Cannabis’s results were surprising. The company’s results have been disappointing for the past few quarters with declining revenues. Tilray has declined by 53.3% YTD, while it has gained 9.9% in May.

In May, Aurora Cannabis stock has gained 92.5%. The most recent stock gains were on May 15 when it surged 68% a day after its third-quarter results. Hexo has gained 51.5% in May. However, the clock is ticking for the stock. Hexo received a NYSE listing notification. Read Hexo Receives NYSE Warning for Listing, Clock Is Ticking to learn more.

Aurora Cannabis’s results drove other cannabis stocks’ performance as well. Aphria (NYSE:APHA), Cronos Group (NASDAQ:CRON), and Green Thumb closed 6.5%, 0.90%, and 4.9% higher, respectively.