A 195% increase in Q1 sales might help cool tensions, in the aftermath of Tilray Inc (NASDAQ: TLRY) shedding more than 80% in market value. The stock has had to contend with wild price swings in recent months, a development that has resulted in a plunge to one-year lows.
Tilray Inc Price Analysis And Catalysts
While an 80% plus plunge raises serious concern, the recent earnings report raises a contrarian opportunity that investors can take advantage of. Sales growth topping estimates underscores a company whose core business is in a phase of robust growth.
The management has also achieved significant progress in integrating recent acquisitions expected to bolster the bottom line on revenue generation. Tilray has also continued to strengthen its footprint with expansion into new markets. The Company has already secured a European Union Manufacturing License paving the way for it to commence export operations into the market.
Amidst the developments, the stock continues to languish at the $43 a share handle after succumbing to short selling pressure. Current lows in our view present an opportunity to buy the stock at a discount. A spike followed by a close above the $53 mark could pave the way for further upside action as investors continue to react to a string of positive developments.
Below the $53 resistance level, Tilray remains susceptible to continue edging lower given the underlying bear trend. While the stock remains bearish given the underperformance of the past year, a bounce-back could come calling as investors continue to digest a wave of positive developments that underscore the Company’s long-term prospects.
About Tilray Inc
Tilray bills itself as a leader in cannabis research, cultivation as well as production and distribution of cannabis and its derivatives. The Company offers its products to patients, physicians, as well as pharmacies and governments.
Q1 Sales Growth Boost
Q1 earnings report has offered a glimpse of hope about Tilray prospects after a long period of raging concerns. The Company delivered a better than expected quarterly revenue helped by recreational sales legalization In Canada.
Revenues for the first three months of the year totalled $23 million representing a 195% year over year increase. The Company sold 3,012 Kgs worth of cannabis in the quarter more than double the amount sold the previous year. However, Tilray succumbed to a net loss of 27 cents a share, attributed to a 5.7% fall in the average price per kilogram of cannabis sold.
During the quarter, Tilray also achieved significant milestone key among them being the integration of Manitoba Harvest and Natura Naturals acquired to strengthen the Company’s core business and competitive edge.
“As we expand our operations around the world, we remain focused on making disciplined investments to maximize the multiple paths to value creation we are aggressively pursuing for our visionary investors,” stated CEO Brendan Kennedy.
Tilray Strategic Initiatives
In addition, the CEO has confirmed that they are exploring strategic partnerships with both U.S and International firms. Tilray is relying on such partnerships to help strengthen its competitive edge as the $150 billion global cannabis market undergoes a change in the form of consumer acceptance and regulation.
Expansion into new markets is one of the strategic initiatives that Tilray is pursuing in pursuit of opportunities for growth. It’s wholly owned subsidiary Tilray Portugal has already secured a standard manufacturing license and Good Manufacturing Practices certification.
The license and certification pave the way for the Company to engage in the exportation of dried cannabis on the international markets. That Company has since set sights on Germany among other European member states, as markets for its dried cannabis and other cannabis derivatives.
“We’re proud to increase our international export capacity and are looking forward to exporting dried cannabis as active substances from our EU Campus to legal jurisdictions in the EU and other international markets. The next phase of GMP certification will allow us to utilize the full capacity of our multi-faceted facility and continue to serve more patients in need,” said Sascha Mielcarek, Managing Director, and Europe.
Tilray poor performance in the market might be coming to an end if consolidation in recent weeks is anything to go by. The stock appears to have hit a bottom and due for a correction higher as investors take note of underlying developments that affirm growth metrics.
That said the stock is likely to break out on rallying and stabilizing above the $53 short-term resistance level. For smart traders, this is an ideal stock worth buying on the dip.
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Disclosure: We have no position in TLRY and have not been compensated for this article.