Tilray Inc. (TLRY) Stock Review September 2019

Owing to the momentum that the cannabis industry has picked up in the last few years, there seems to be no turning back! The question many investors ask themselves is: Will the market keeps growing at a pace similar to the present scenario? If yes, then this industry is likely to hit a target of $22 billion by the year 2022.

Moreover, a lot of investors from all around the world invest in cannabis stocks. Tilray Inc is a pharmaceutical and cannabis company. It is involved in the cultivation, processing, and distribution of medicinal marijuana in some states of America and other countries.

About Tilray Inc | NASDAQ: TLRY

Founded: 2013
Founders: Brendan Kennedy, Michael Blue, Christian Groh
CEO: Brendan Kennedy Headquarters: Nanaimo, Canada
Number of employees: 750
Official website: www.tilray.com

The TLRY stocks are considerably new in the cannabis business. They were first announced in July 2018. Within only two months, in about September, considering the upshot of $300, they became the year’s most profitable and best-performing stock.

But soon after two days of this success, the Canada-based company has only recorded a downward graph. The company has its wings in a total of 12 countries, yet this swelling of the market hasn’t worked out in their favor.

Presently, the last three months of May, June, and August have been the roughest for Tilray. The quarterly assessments have proved that in the past five quarters, the stock value has only taken a deep plunge. Many experts think this is due to Tilrays’ inability to justify the demand for cannabis with quality supply. 

Currently, the company has a market capitalization of $2.76 billion.

Moreover, the price range of the stocks falls between the window of $28.28 and $29.60. Also, it has ranged from $28.56 to $47.00 in the last fifty days.

The company currently holds a volume of 2.37 million shares. However, the average size is much lower than this (1.93 million shares).  According to the report for the last quarter, Tilray has improved the value of its shares by $0.32 each. And a total earning of $45.90 million. Investors predicted that the value per share would rise by $0.23.

So far, Tilray was accompanied by negative return equity of 37.64% and a net margin of 121.73%. However, in the last quarter, the revenue scaled up by 373.2% compared to its performance in the three quarters of last year. Further, Tilray experienced a loss of 32% of shares in the second quarter of 2019. This can be considered to be the worst fall to date. 

Therefore, concluding Tilray’s performance so far based on the analysis mentioned above, it has been found that Tilray’s ERP Rating is the lowest. ERP Ratings are indispensable when calculating a company’s growth in comparison to its contemporaries. Today, the ERP Rating of the stock is 1, while the best Rating is 99. 

Advantages and Disadvantages of Tilray Inc

Before we arrive at an accurate interpretation of whether or not to invest in Tilray stocks, it would be rather wise to get an overview of the company’s pros and cons. So, let’s begin with the advantages of TLRY.

Advantages

Tilray is looking forward to the years of 2020 and 2021, where they are aiming to pull the strings of demand and supply equally to maintain the much-required balance. However, the company is facing challenges of production and distribution shortages along. Despite this, Tilray has still signed a few deals that will allow them to swell their supply of CBD products into more dispensaries around the USA. 

To meet customer expectations, Tilray has collaborated with a third-party dealer. The mentioned dealer will be supplying the company with raw materials for production. Thus, surveying better opportunities to improve quality.

Recently, the company has also acquired a company in Canada known as “Natura Naturals.” This company owns a cultivation center covering numerous acres of land. This is a positive step towards improving the quantity keeping the quality intact.

Additionally, Tilray’s tie-up with Authentic Brands Group (ABG) has created safe grounds for the company to distribute CBD and edibles in the market diligently. Lastly, Tilray’s partnership with Novartis, the stalwart of pharma companies in Canada, will grant them access to the global market with ease even across the countries of Europe. 

Tilray experiences some advantages because of its supplier deals in Canada. Marley Natural, the official brand of Bob Marley, based in Ontario, uses its brand name to supply Tilray’s products. Thus, reaching out to a broader spectrum of customers in America.

These are the top reasons that draw Tilray’s top investors in their stocks. With the company’s partnerships with other popular brands of the market, it always leaves them with a scope to improve their business. Thus, furnishing their shareowners with higher rates of profit.

Disadvantages

The cons of this pharmaceutical and cannabis company, in reality, outshine the pros, which justifies its present market status.

The stocks of Tilray in Composite Ratings are as low as 14. For example, the rulers of the market own a rank that is higher than 90. Moreover, the company’s consistent loss has led them to accomplish the S&P of 500, which is much lesser than what was expected.

The market status of Tilray, when compared with other marijuana companies, is disappointing. One of the main reasons that can be attributed to this lagging is that the company primarily focuses on medical marijuana. Instead, Tilray should consider the competition in the market. Moreover, it should increase its branches and variety of production.

In June, Tilray aimed at extending its lockup shares of Privateer Holdings. Privateer Holdings is their most significant shareholders for the next two years. Unfortunately, the stocks failed and led to a disagreement.

In July 2018, Tilray had raised $135 million in an IPO. Since then, their stocks only fell, and no attempts have been made to retrieve their position. Also, the decrease in the number of shares sold over the years has left investors in a very ambiguous spot with the instability and frequent price swings.

Is Tilray stock a good investment?

Before investing in TLRY stocks, take into consideration Tilray’s performance over the last few quarters. Trade analysts think it is almost impossible for the company to step out in the glory of profit anytime soon.

Also, other cannabis companies display a steady market position over time. This has been drawing a lot of the company’s target customers and shareholders steering Tilray towards enhanced misery. Within a year or two, the company might encounter a few profits here and there.

However, the overall EBITDA for the next 5-6 quarters is going to remain unchanged. Are you still thinking about your investment plans in TLRY stocks? Well, we would advise you to hold your vision for some time. Wait until the company keeps up with its competitions. 

Summary

From the assessment that we have curated so far, you need to consider two things. First, the company has no strong structure or plan to rely upon to compensate for the losses. Second, its stocks are incredibly weak in comparison to the other manufacturers.

Consequently, the doubts accompanying the purchase of TLRY stocks are too high for investors who are willing to gain easy returns.