Hexo Deal Good or Bad for Tilray?

Morningstar Maintains "Buy" Rating on Tilray Stock with CAD 4.20 Forecast

Hexo Deal Good or Bad?

Tilray, has just agreed to purchase Hexo Corp, but like many other cannabis companies, has faced a multitude of obstacles in recent years. The industry has been grappling with regulatory hurdles, oversupply issues, and challenges in accessing traditional banking and capital markets. Additionally, the competitive landscape has become increasingly crowded, with new players entering the market and driving down prices, resulting in margin pressures for cannabis producers.

One of the key reasons behind the concerns about Tilray’s financial health is its mounting losses. The company has reported significant losses in recent quarters, and its debt levels have been on the rise. Tilray’s financial statements have shown negative operating cash flows, and its net income has been consistently in the red. This has raised concerns about the company’s ability to generate sustainable revenue and achieve profitability in the long term.

Tilray’s stock price has also been highly volatile, experiencing significant fluctuations over the past few years. While it has had moments of impressive growth, it has also experienced sharp declines, eroding investor confidence and raising questions about the company’s stability.

Under the existing  background of concern over Tilray’s finances,   some analysts argue the purchase of Hexo could impair Tilray  further, while others believe it is a positive step for the company to grow market share and cut costs and save on synergies.

TLRY:CA Ratings by Stock Target Advisor

TLRY Stock Forecast & Analysis

According to a forecast from 5 analysts, the average target price for Tilray Inc, a cannabis company, is CAD 7.21 over the next 12 months. The average analyst rating for Tilray Inc is Strong Buy. Stock Target Advisor’s own analysis of Tilray Inc is Slightly Bearish, based on 4 positive signals and 5 negative signals. As of the last closing, Tilray Inc’s stock price was CAD 3.73, showing a change of +9.71% over the past week, +11.34% over the past month, and -53.66% over the last year.

TLRY Earnings

Tilray Brands, Inc. (TLRY) has reported a quarterly loss of $0.04 per share, which was better than theConsensus Estimate of a loss of $0.05 per share. However, this is a decrease compared to earnings of $0.04 per share in the same quarter last year. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 20%, as the company exceeded expectations. However, in the previous quarter, it was expected that Tilray would post a loss of $0.05 per share, but it actually reported a loss of $0.06, resulting in a negative surprise of -20%.

Over the past four quarters, Tilray has only surpassed consensus EPS estimates once, indicating inconsistent performance.

In terms of revenue, Tilray reported $145.59 million for the quarter ended February 2023, falling short of the Analyst Consensus Estimate by 2.72%. This is a decrease compared to revenues of $151.87 million in the same quarter last year. Similar to earnings, Tilray has only exceeded consensus revenue estimates once in the past four quarters.

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