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Tilray (TLRY) to Report Q3 Earnings: What's in the Cards?

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Tilray, Inc., (TLRY - Free Report) produces medical cannabis in Canada and Europe. The company is a global pioneer in the research, cultivation, production and distribution of medical cannabis and cannabinoids. Tilray was the first licensed producer of medical cannabis in the world to have its facility Good Manufacturing Practices (GMP) certified in accordance with European Medicine Agency (EMA) standards.

The company completed its IPO, selling 10,350,000 shares of Class 2 common stock at $17 per share (C$22.45 per share), and obtained net proceeds of $163.6 million after deducting the underwriting discount.

The company has two product categories: dried cannabis, which includes whole and ground flowers; and cannabis extracts, which includes full-spectrum and purified oil drops and capsules. The company recorded 95.2% growth in revenues, driven by increasing patient demand in Canada, sales to other Licensed Producers and international sales in the second quarter. We expect the momentum to continue in the third quarter as well.

In October 2018, Canada became the first G7 country and the second country in the world to legalize cannabis sales for adult recreational use. This, in turn, should propel sales. Medical cannabis is now authorized at the national or federal level in 29 countries. Although the legal market for medical cannabis is still in its early stages, it represents huge potential.

Another positive for Tilray is its collaboration with Sandoz Canada, Inc., an affiliate of Sandoz International GmbH, which is the generic division of Swiss pharma giant Novartis Group (NVS - Free Report) to market cannabis.

The company also strengthened its presence in Latin America with the acquisition of Alef Biotechnology. The acquisition will allow Tilray to import, produce and distribute Tilray branded medical cannabis products in Chile and create a hub to distribute its products across Latin America.

Tilray’s stock has gained 383% after it went public, against the industry’s year-to-date decline of 5.8%.

 

Investors will focus on pipeline progress and updates when Tilray reports third-quarter results on Nov 13.

Zacks Rank & Stocks to Consider

Tilray currently carries a Zacks Rank #4 (Sell).

A couple of better-ranked stocks in the healthcare sector are Gilead Sciences Inc. (GILD - Free Report) and Bristol-Myers Squibb Co. (BMY - Free Report) . Both sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings per share estimates increased from $6.58 to $6.87 for 2018 over the past 60 days. Estimates for 2019 are also up by 27 cents.

Bristol-Myers’ earnings per share estimates have increased from $3.59 to $3.84 for 2018 and from $3.83 to $4.07 for 2019 over the past 60 days.

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