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Tilray (TLRY) to Report Q4 Earnings: What's in the Cards?

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Tilray, Inc. (TLRY - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 17, after market close.

In the last reported quarter, the company missed earnings expectations by 28.57%. The company has a disappointing track record. Tilray missed earnings estimates in three of the last four quarters and beat in the remaining one, the average negative surprise being 29.65%.

Let us see how things have shaped up prior to this announcement.

Factors at Play

Tilray is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids.

Revenues were flat year over year in the last reported quarter, as business was negatively impacted due to the restrictions on, or temporary closure of, retail outlets, and the challenges faced by patients accessing clinics and doctors for prescriptions for products. Cannabis segment revenues decreased 11% due to the discontinuation of bulk sales and a slight decrease in Canada Medical sales. Similar trends have likely prevailed in the fourth quarter.

Adult-Use and International Medical sales grew 26% and 42%, respectively, in the third quarter and Hemp segment revenues also increased 28%. Similar trends have most likely prevailed in the to-be-reported quarter.

Total cannabis kilogram equivalents sold decreased 53%, almost entirely due to the reduction of bulk sales, and the fourth quarter has most likely witnessed the same.

Gross margin declined significantly in the previous quarter and the same might have been the trend in the to-be-reported quarter.

Moreover, the company ended the third quarter of 2020 with $155.2 million in cash and cash equivalents. Investors will focus on the company’s plans to manage operations with the available cash resources.

A Key Recent Development

In December 2020, Tilray and Aphria Inc. entered into a definitive agreement to combine their businesses and create the world’s largest global cannabis company. Per the agreement, shareholders of Aphria will receive 0.8381 shares of Tilray for each Aphria common share.  Further updates on the same are awaited on the call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Tilray this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Tilray is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank of 3.

Share Price Performance

Tilray’s stock has surged 251.1% in the year so far compared with the industry’s growth of 8.9%.

 

Stocks to Consider

Here are a few stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Moderna (MRNA - Free Report) has an Earnings ESP of +0.57% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bausch Health (BHC - Free Report) has an Earnings ESP of +7.49% and a Zacks Rank #3.

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Moderna, Inc. (MRNA) - free report >>

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Tilray Brands, Inc. (TLRY) - free report >>

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