|Bid||N/A x N/A|
|Ask||N/A x N/A|
|Day's Range||2.7500 - 2.7500|
|52 Week Range||0.0090 - 6.7500|
|Beta (5Y Monthly)||10.69|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||1.20|
OTTAWA, ON, March 17, 2021 /CNW/ - "It has been just over 110 days since we made the offer to the provinces to improve AgriStability. We are asking for a clear indication from the three Prairie provinces whether they will sign on or not.
Tilray (NASDAQ:TLRY) just reported its Q4 and full-year 2020 earnings on Feb. 17. The most important news was that the company finally was able to achieve EBITDA (earnings before interest, taxes, depreciation,and amortization) profitability. This news, along with the upcoming merger with Aphria (NASDAQ:APHA), could push TLRY stock up over the next year. Source: Jarretera / Shutterstock.com Tilray reported that it achieved its stated goal of becoming breakeven or positive EBITDA. It made $2.2 million in adjusted EBITDA during Q2. This is compared to negative $35.3 million in adjusted EBITDA last year. The company did this by both raising revenue by 26% over last year and by cutting costs by $57 million over that period. Tilray said it now operates with a “more focused, efficient and competitive cost structure.”InvestorPlace - Stock Market News, Stock Advice & Trading Tips It did not produce a cash flow statement in its press release. That will come out with the 10-Q in several days. However, I suspect that it shows that the company still is burning cash. This is because EBITDA does not include things like capex spending, working capital changes, debt and tax payments. Merger With Aphria Tilray’s merger with Aphria, announced in December and set to close in Q2, will create the largest cannabis company. The company says that the “new Tilray” will have synergies of over 100 million CAD in cost savings from both companies. This will bring significant value to the combined company. 7 Overvalued Stocks Investors Just Don’t Get Tired Of If those synergies work out within the next year, that could potentially mean roughly $80 million in adjusted EBITDA. Assuming half of that leads to free cash flow (FCF), along with 20% growth, the FCF of the combined company could be as high as $50 million. Therefore, assuming the merger results in a new market capitalization of approximately $13 billion, the FCF yield of the new company would be 0.38%. That is a fairly high valuation. But the market will likely realize that once the company is FCF positive then it is likely to grow over time. In several years, if the combined company’s FCF were to triple to, say, $150 million, the market value of the two would have a 1.15% FCF yield. This means that at today’s price the company is probably fairly valued. However, the market is going to want to see more of this. For TLRY stock to move higher after the merger, the combined companies would have to be much more profitable than today. What to Do With TLRY Stock Short interest in TLRY stock is now at 20% of the public float, according to Yahoo! Finance. That is a very high level, although it is down from 36.6% over a week ago. This is because short-sellers think the combined merger will likely lead to further losses. Or, even worse, that the merger may not even occur at all. Although I doubt the latter, it is true that Tilray and Aphria are going to have to show how profitable they can become after the merger. Others think the merger will benefit from President Joe Biden’s administration loosening up restrictions on the purchase and sale of cannabis. So far nothing has happened along these lines, but it is still early. Cantor Fitzgerald has a $30.25 price target on Tilray but said in their note that the volatility in the sector may keep investors away from TLRY stock. Other analysts are not as sanguine on the stock. For example, Yahoo! Finance, which uses data from Refinitiv, has a much lower average price target. Their data from 11 analysts show that the average price target is just $18.25, or 36% below today’s price of $28.61. TipRanks.com says that the average price target of 10 analysts is $19.39, or 32% below today’s price. MarketBeat reports that 15 analysts have an average target price of $18.40, implying a 36% drop in TLRY stock. In essence, no one is positive on the stock. The company has a lot to prove to analysts and investors. Most investors will probably wait until they can see evidence of sustained profitability, not just on an EBITDA basis, but also with cash burn. On the date of publication, Mark R. Hake does not hold a long or short position in any stock or security mentioned in this article. Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post Tilray Will Be the Largest Cannabis Company Once It Merges With Aphria appeared first on InvestorPlace.
Shares of Tilray surged 11% in pre-market trading on Feb. 18 as the cannabis producer’s fourth-quarter loss narrowed to $0.02 per share from loss of $2.14 during the same period last year. Analysts were expecting a loss per share of $0.15. Revenues came in at $56.6 million, up by 20.5% year-on-year and ahead of consensus estimates of $55.7 million. Tilray’s (TLRY) CEO, Brendan Kennedy, said, “Over the course of 2020, and despite COVID-19 related challenges, we transformed and strengthened Tilray, delivered solid full year results, significantly reduced net loss, and achieved our stated goal of delivering break even or positive Adjusted EBITDA in Q4 2020.” Kennedy added, “We did so by generating meaningful revenue growth across our core businesses, particularly international medical and Canadian adult-use in Q4, and reducing costs by $57 million on an annualized basis compared to Q4 of 2019. As a result, we now operate with a more focused, efficient and competitive cost structure. We also strengthened our balance sheet and positioned Tilray for growth and success in the future in combination with Aphria.” In December last year, the company announced a merger with Aphria (APHA) with a combined pro forma equity value of $3.9 billion and pro forma revenues of $685 million. The company expects to close the merger in the second quarter of this year. (See Tilray stock analysis on TipRanks) A major driver for revenue growth in the fourth quarter was the cannabis segment with revenues up by 46% year-on-year to $41.2 million. Cannabis sales were mainly driven by international medical sales and Canadian adult-use sales in 4Q. Following the earnings results, Oppenheimer analyst Rupesh Parikh assigned a Hold rating on the stock. Parikh said, “…TLRY management delivered positive adjusted EBITDA of $2.2M ahead of a consensus figure of $0.3M driven by a stronger gross margin delivery and benefits from stringent expense controls. We now await approvals for the Aphria combination, which is expected to close in Q2 2021.” The rest of the Street is sidelined about the stock with a Hold consensus rating. That’s based on 1 analyst recommending a Buy, 6 analysts a Hold, and 1 analyst a Sell. The average analyst price target of $14.58 implies about 53.7% downside potential to current levels. Related News: Tilray To Supply Medical Cannabis To France; Shares Gain 14% Sleep Number Spikes 13% After Blowout Quarter; Street Says Hold Hexo Snaps Up Zenabis Global For C$235M; Shares Pop 22% More recent articles from Smarter Analyst: Twilio Pops 11% After-Market On Surprise Profit In 4Q; Street Is Bullish Sleep Number Spikes 13% After Blowout Quarter; Street Says Hold Shopify’s 4Q Sales Pop 94% As Online Buying Booms; Shares Dip 3.3% Baidu Tops 4Q Estimates Driven By Strong AI Demand; Shares Gain