Categories Analysis, Cannabis, Health Care
Earnings preview: Tilray stock might see big fluctuations post Q3 results
It can be safely said that cannabis is this year’s bitcoin – be it the debates surrounding its regulation or the immense investor interest. And one company has managed to stay above the hundreds of firms that are looking to make a killing out of the glittering prospects of marijuana – Tilray (TLRY).
Tilray is reporting third-quarter earnings results after the market closes on November 13, Tuesday.
The stock had almost quadrupled in value since going public in July, before paring some of the gains in October. In its first quarterly results since Canada legalized the recreational use of cannabis, the Nanaimo-based company is expected to report a smaller sequential loss of 14 cents per share. During the second quarter, the company had reported a loss of 17 cents per share.
Meanwhile, revenue had almost doubled year-over-year in Q2 to $9.74 million. With more global acceptance for its products and higher patient demand, Tilray is likely to see another spellbinding revenue growth in the third quarter. Analysts expect Tilray to post revenue of $10 million during the quarter.
However, do not expect the recent legalization in Canada to have a big impact, as it happened quite late into the quarter. On the other hand, look out for management comments on how the company expects to take advantage of these tailwinds to ramp up the production capacity.
Peers such as Canopy Growth (CGC) and Aurora Cannabis are already investing cash in hand to build better facilities that improve operational efficiency and generate more profits. The Q3 earnings conference call will the right platform for Tilray to convince investors that it is not slacking in this regard.
Tilray is also likely to give updates on its import drug, which has received approval from the US Drug Enforcement Administration for clinical study in patients suffering from a neurological disorder called Essential Tremor. The company, along with the International Essential Tremor Foundation will fund the study, which will be held at the University of California San Diego Center for Medicinal Cannabis Research.
TLRY stock has an average price target of $135.67, which is at an 18% upside from Monday’s open. The stock is highly volatile and prone to wide fluctuations post earnings. However, for the time being, Tilray looks like the best bet in the marijuana industry.
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