TLRY stock is still a pass, Haywood says

Following the company’s most recent results, Haywood analyst Neil Gilmer has maintained his “Hold” rating on Tilray (Tilray Stock Quote, Chart, News, Analysts, Financials TSX:TLRY)

On October 4, Tilray reported its Q1, 2024 financials. The company posted Adjusted EBITDA of (US) $11.4-million on net revenue of $177-million, up from the $153-million topline the company posted in the same period last year.

“Today, Tilray Brands is the most diversified global cannabis lifestyle and CPG company in the world with four distinct and complementary business segments — medical and adult-use cannabis, beverages, including craft beer, spirits, ready-to-drink mixed cocktails in a can, non-alcoholic drinks, THC and CBD beverages, wellness products, and medical distribution,” said CEO Irwin D. Simon. “The balance we have brought to our diversified business model has positioned Tilray Brands as the No. 1 Canadian cannabis LP, the market leader in medical cannabis across Europe, a leader in the hemp foods industry and a formidable player in the fast-growing craft beverage alcohol industry with a growing leadership position. We have strategically diversified our company globally over the past several years and, as a result, Tilray is now ideally positioned to capture a wide range of opportunities across multiple industries driving value through organic and acquisitive revenue growth, operating efficiencies, and improved margins and profitability. We will continue to invest in our future and accelerate our vision of becoming a multibillion-dollar company with a portfolio of best-in-class brands.”

The analyst summarized the quarter.

“Tilray released its FQ1 results for the period ended August 31, 2023 that were slightly above out expectations on the top-line with adjusted EBITDA coming in modestly below our forecast but was in-line with consensus. The Canadian cannabis segment reported solid growth, in part aided by the closing of the Hexo transaction in late June, with management also citing organic growth in the quarter. A wholesale transaction also boosted revenues but negatively impacted gross margins.”

In a research update to clients October 4, Gilmer maintained his “Hold” rating and one-year price target of $2.00 on TLRY, implying a return of negative 10 per cent at the time of publication.

The analyst thinks TLRY will posted Adjusted EBITDA of $64.3-million on revenue of $800.7-million in fiscal 2024. He expects those numbers will improve to EBITDA of $96.1-million on a topline of $900.1-million the following year.