Tilray Has Weak Top-Line Growth, Stock Isn't a Buy Right Now

So far in 2020, Tilray stock has fallen 54 percent. Is the stock a buy or sell at this price? How's the company's outlook?

Ambrish Shah - Author

Dec. 16 2020, Updated 11:22 a.m. ET

is tilray a good stock to buy
Source: istock, Tilray Facebook

On Dec. 15, Tilray stock rose by 6.8 percent, while the S&P 500 gained 1.3 percent. The stock has risen $0.50 from its previous closing price of $7.37 on a volume of 13,002,008 shares. Over the past year, the S&P 500 has risen by 15.7 percent, while Tilray stock has lost 54.1 percent. Is Tilray stock a buy or sell at this price?

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As of 7:22 a.m. ET in pre-market trading on Dec. 16, Tilray stock was up by about 31.8 percent at $10.37. The stock rose after Tilray agreed to merge its operations with Aphria. The two cannabis giants agreed to join forces in an all-stock deal. The combined company would be the world’s largest cannabis production and distribution company.

Is Tilray a Good Stock to Buy?
Source: Pixabay
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Under the terms of the deal, Aphria shareholders will get 0.8381 shares of Tilray for each Aphria share owned. The offer represents a 23 percent premium to Tilray’s last closing price. The combined entity will likely have an equity value of $3.8 billion.

Tilray on Stocktwits

Tilray stock has become a major talking point on social media platforms. An investor going by the name BigFatBear on Stocktwits thinks that the Aphria and Tilray merger is a bad deal for Aphria. The investor isn’t happy with the merger and thinks that Aphria could become the Amazon of the cannabis industry without Tilray’s merger. Also, Aphria has a superior product compared to Tilray. The investor would have supported an Aphria merger with Trulieve.

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What is Tilray’s stock price history?

Tilray stock has fallen by 0.6 percent in the last five days and 54.1 percent in the last year. The stock is trading 65.7 percent below its 52-week high of $22.95 and 223.9 percent above its 52-week low of $2.43.

Does Tilray pay dividends?

Currently, Tilray doesn’t pay dividends. On the company's website, it says, “Currently, Tilray does not offer a dividend or a dividend reinvestment program.”

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What is Tilray’s stock forecast?

According to estimates compiled by CNN, analysts' median target price of $9 for Tilray is 14.4 percent above its current stock price. Among the 16 analysts tracking Tilray, two recommend a buy, 13 recommend a hold, and one recommends a sell. The highest target price of $15 is 90.6 percent above the stock's current price, while the lowest target price of $5 is 36.5 percent below the stock's current price.

Is Tilray stock a good buy?

Tilray stock isn’t a buy right now since the company’s top-line growth looks weak. In the third quarter, Tilray’s cannabis revenues rose by just 4 percent sequentially with the cannabis industry recovering from the devastating COVID-19 pandemic. The company’s medical sales fell by double-digits. Currently, cannabis use and sales in the U.S. aren't legal at the federal level.


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