The focus will be primarily on revenue growth amid the pandemic for
Tilray, Inc. ( TLRY Quick Quote TLRY - Free Report) when it reports first-quarter results.
In the last reported quarter, the company beat earnings expectations by 42.86%. The company has a decent track record. Tilray missed earnings estimates in two of the last four quarters and beat in the remaining two, the average negative surprise being 1.66%.
Let us see how things have shaped up prior to this announcement.
Why a Likely Positive Surprise
Our proven model predicts an earnings beat for Tilray this season. 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. 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 +11.48%. Zacks Rank: It currently carries a Zacks Rank #3. Factors at Play
Tilray is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids.
Revenues grew 20.5% year over year in the last reported quarter to $56.6 million, driven by revenue growth across core businesses, and similar levels of growth have most likely prevailed in the quarter under review. Cannabis segment revenues increased 46%, driven by the acceleration of International Medical sales (+191%) and Canadian Adult-Use sales (+49%). Canadian medical sales grew 26%. Similar trends have likely prevailed in the first quarter.
However, Hemp segment revenue ads decreased 18% year over year due to a shift to private-label products with a large customer and the impact of COVID-related changes on consumers’ shopping patterns, a trend that has most likely continued in the to-be-reported quarter.
Total cannabis kilogram equivalents sold decreased 54%, almost entirely due to the reduction of bulk sales, and the first quarter has most likely witnessed the same.
Gross margin increased to 29% from 7% in the previous quarter and the same might have been the trend in the to-be-reported quarter.
A Key Recent Development
Tilray completed its previously announced merger with Aphria Inc. The combined company is one of the leading cannabis-focused consumer packaged goods companies with the largest global geographic footprint in the industry. Each Aphria shareholder received 0.8381 of a Tilray Share for each Aphria common share held on Apr 30, 2021. The operational efficiencies from this combination are expected to generate approximately $81 million of annual pre-tax cost-saving synergies for the company within eighteen months.
Share Price Performance
Tilray’s stock has rallied 111.6% in the year so far against the
industry’s decline of 8.4%. Other Stocks to Consider
Here are a few other stocks you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Ironwood Pharmaceuticals ( IRWD Quick Quote IRWD - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #1. You can see . the complete list of today’s Zacks #1 Rank stocks here Kala Pharmaceuticals, Inc. ( KALA Quick Quote KALA - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #2. Incyte ( INCY Quick Quote INCY - Free Report) has an Earnings ESP of +8.48% and a Zacks Rank #3. Breakout Biotech Stocks with Triple-Digit Profit Potential
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