Tilray Shares Fall After Q4 Print, Analyst Questions Positive EBITDA Projection

Tilray Inc TLRY reported a fourth-quarter adjusted EBITDA loss of $35 million, highter than the $20.4-million loss the Street was expecting and Tilray's $13.3-million loss in the same period last year. 

The company posted a net loss of $219.1 million, or $2.14 per share, versus a loss of $31 million and 33 cents per share in the comparable period of the previous year.

The Tilray Analysts

Cantor Fitzgerald’s analyst Pablo Zuanic reiterated a Neutral rating on Tilray and lowered the price target from $19.50 to $17.50.

MKM Partners’ Bill Kirk reiterated a Neutral rating with a $26 price target. 

Oppenheimer analyst Rupesh Parikh reiterated a Perform rating on Tilray. 

Cantor Questions Tilray’s Power To Reach Positive EBITDA By Q4

“Average recreational cannabis net price (inc.bulk) of C$2.50 is the worst in our LP coverage,” Zuanic said in a Tuesday note. 

The downside could be lowered by Tilray's enthusiastic projections such as reaching positive EBITDA by the fourth quarter, Zuanic said. But the analyst questioned the company’s power to reach positive EBITDA and said that “aggressive guidance leaves room for disappointment.”

Although Cantor expects a better year for licensed producers, Zuanic said the firm still favors Aurora Cannabis Inc ACB over Tilray.

MKM Partners Pleased With Tilray’s Strategies, Suggests Focus On Europe

Kirk said in a Monday note that he appreciates Tilray’s strategy, specifically moves like reaching the U.S. through Manitoba Harvest; growing in Portugal's advantageous climate; and labor to support its coverage in Europe.

“Tilray valuation is more reasonable (~10x EV/2023 EBITDA) than many peers, but next year’s (FY20) numbers are still too high in our view,” the analyst said. 

MKM Partners projects Tilray’s “profitability to come under increasing pressure with new supply coming on,” suggesting the company should focus on making the most of its sales from Europe with product cultivated in Portugal.

Oppenheimer Sees Short-Term Headwinds

Tilray faces many challenges in the short-term, such as “regulatory challenges in the U.S. and ongoing headwinds in the Canadian market,” Oppenheimer’s Rupesh Parikh said in a Monday note. 

Tilray Price Action

Tilray shares were down 14.72% at $13.09 at the time of publication Tuesday.