Tilray Inc. (NASDAQ: TLRY) is expected to release its Q2 2022 earnings on Monday, January 10, 2022, before market open.
What to look for
In 2021 the company had an eventful year, and from a price perspective, it has been on a skid. This is an opportunity for some, considering the company is a bigger player in the cannabis sector. Although the company reported a 43% sales increase in the last quarter, it still lost $35 million. There are questions regarding the company's business model, and when the company releases quarterly results, investors will be keen on what the company is doing to produce cannabis profitably.
Earnings: Stockearnings Estimated EPS for the current quarter under review is $0.09 per share. In its last earnings release, the company had earnings per share of $0.08, missing analysts estimates of$0.06. Historical EPS Performance for the past 12 quarters shows that the company has topped estimates twice and missed estimates ten times (83%).
Revenue: In the last quarter, the company had revenue of $168 million relative to analysts’ estimates of $174 million a year ago. The increase in revenue resulted from an increase in net cannabis revenue by 38% beverage alcohol revenue of $15 million after the acquisition of SweetWater and $15 million wellness revenue from Manitoba Harvest.
Stock movement: Tilray shares have lost 31.5% since the company released its last quarter earnings. Notably, TLRY shares have been DOWN 10 times out of the past 14 quarters. So, the historical price reaction suggests a 71% probability of the share price going DOWN once the company reports its fiscal Q2 2022 earnings. According to the Stockearning algorithm, the predicted first-day move is 10%, while the predicted move on the seventh day is 17%.
What analysts are saying
Piper Sandler analyst Michael Lavery has slashed Tilray’s price target to $8 from $13 but maintains a Hold rating on the stock. Lavery stated that the company stands out among competitors because of its direct access to the European Union. However, Canadian market dynamics are impacting pace. As a result, Lavery said he's decreasing his forecasts owing to "strong" competition in Canada, which has resulted in "substantial" share loss, as well as some unanticipated inventory destocking.
Barclays analyst Gaurav Jain commenced coverage on the stock with a Sell rating and a $10 price target. In a research note, Jain informs investors that the cannabis operator has been aggressive in its deal-making and that it is utilizing its "own pricey shares" rather than cash for these purchases, which can create "(extremely) long-term shareholder value." As a result, Tilray's investor expectations, according to the analyst, are too high.
Cantor Fitzgerald analyst Pablo Zuanic has downgraded Tilray from Buy to Hold, with a price target of $11.80, down from $18.00. Canopy Growth (CGC) is ahead of Tilray in developing a US ecosystem, has a better balance sheet, and Constellation Brands (STZ) as a backer, according to Zuanic, who also claims that Canopy's CPG segment is more established than Tilray's. In a research note, Zuanic also warns investors that while Tilray's management has articulated a $4 billion sales objective by 2024, he believes M&A will be the driving factor of that growth path for them.
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