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Tilray Struggles Post-Q3 as Most Analysts Say ‘Hold’

Like many of its peers, Tilray (TLRY) is struggling after its fiscal 2019 third-quarter earnings release. Even though the company’s revenue met analysts’ estimates, its stock continues to slide. It’s already lost 9.6% of its value since its earnings release. Currently, it’s trading at $19.81.

Recap of Tilray’s financials

Tilray reported revenue of $55.1 million in the third quarter, 10% higher than analysts’ consensus estimate and 408.6% higher than its revenue from the same period last year. The company reported adjusted EBITDA of -$23.5 million, 20.7% lower than analysts’ estimate of -$19.46 million.

The company also reported net income of -$35.7 million, almost 25% lower than analysts’ estimate of -$28.6 million. As per analysts’ forecasts, the company isn’t expected to be profitable in the near future. After its earnings release, analysts covering the stock predicted revenue of $318 million in 2020.

Analysts’ recommendations and target price

Tilray stock is currently covered by 17 analysts, one fewer than last month. Of these 17 analysts, one recommends a “strong buy,” four recommend “buys,” and 12 recommend “holds.” Even though the stock doesn’t have any “sell” or “strong sell” recommendations, analysts are cautious.

The stock’s consensus target price currently stands at $34.50, implying a decline of 19% from last month’s consensus target price of  $42.67. This target price is still 74.15% higher than the current traded price, providing ample scope for growth.

Trend analysis

The stock is down more than 72% year-to-date. Even though it’s down this year, it’s gained attention from analysts. The number of analysts covering it has increased from seven at the start of the year to 17 right now. Its consensus target price has been continuously falling for the last five months.

The stock’s price has fallen almost 82% over the last year. Its current level of $19.81 implies a decline of almost 9.6% in value of the stock from the time of its earnings release. Its current price is just slightly above its 52-week low of $19.50.

Tilray versus its peers

Along with Tilray, most of its peers are seeing declines in their values mainly due to unsatisfactory earnings releases by many of the companies in the industry. After its earnings release, Tilray fell 9.6%. Canopy Growth (CGC) (WEED) stock is down almost 15% in the last three days. Aurora Cannabis (ACB) (ACB.TO) also missed analysts’ estimates. The company has lost more than 9% within less than a day of its earnings release.

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