TLRY: Is this Popular Stocktwits Company Still A Risky Bet?

Canadian Healthcare stocks have underperformed the broader markets since early 2019. Most of these domestic marijuana producers were on an absolute roll just before Canada legalized pot for recreational use almost three years back. However, since then these companies have been impacted by tepid demand that can be attributed to the slower than expected rollout of retail stores in major Canadian provinces. This in turn led to high inventory levels, massive write-downs, and negative profit margins. A thriving black market further exacerbated these issues and the emergence of COVID-19 impacted demand as well. A Canadian Cannabis stock that went public in July 2018 and is also popular on social-media platform StockTwits is Tilray Brands, Inc.. The company closed trading at 52 weeks high of $23.04 per share on June 9, 2021, and have since declined by a staggering -19.92% to currently trade at $4.82. TLRY is one of the most followed companies on StockTwits with over 166.57k impressions. While StockTwits might not be the best source of quality investment analysis it provides us with a proxy for retail investment trends for a particular company. Given the rapidly expanding Healthcare market, TLRY stock might seem like the ultimate contrarian bet for investors, but it also carries significant risks. Shareholder dilution for TLRY stockholders As cannabis producers including Tilray Brands, Inc. are grappling with huge losses and cash burn, they have raised equity capital several times in the past resulting in shareholder dilution. In the last 6 months, TLRY issued 28.85M shares. Analysts expect Tilray Brands, Inc. to narrow its losses to $-0.68 per share in 2022. However, given its outstanding share count, it suggests the company will post over $123.18M in profit on estimated sales of $513.09M in 2022. TLRY ended the quarter with a balance of $376.3M giving it enough liquidity to improve margins over time. However, if the company aims to gain traction via acquisitions, it will need to raise additional equity capital to maintain a debt-free balance sheet. In the Q2 of 2022, Tilray Brands, Inc. has issued 46,000 common shares at an average price of $4.82. TLRY aims to pivot In 2022, Tilray Brands, Inc. has looked to reduce its product portfolio and focus on high-margin items to improve its bottom line. While the Toronto-based company has tried several measures to improve its fortunes, including acquiring rival Aphira to create what has been called the “world's largest cannabis company,” nothing has been able to stop the slide in the share price. Here, Tilray Brands, Inc. will provide growth capital to companies in the Healthcare sector and deploy capital strategically through direct and indirect investments. In 2022, Tilray Brands, Inc.'s Healthcare sales stood at $513.09M which was higher by $122.09M than its year-ago revenue of $391M. However, its cost of sales stood at $122.39M indicating a negative gross margin. In 2022, Tilray Brands, Inc.'s operating income was $-68.56M which was significantly lower by -70.49M than the prior-year loss of $1.93M. TLRY stock is valued at a market cap of $2.66B which means its forward price to 2023 sales multiple is really steep making it a high-risk bet for investors.

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TLRY: Is this Popular Stocktwits Company Still A Risky Bet?

Apr 28, 2022

bullish

fundamentals Analysis

[3 min Read]

Canadian Healthcare stocks have underperformed the broader markets since early 2019. Most of these domestic marijuana producers were on an absolute roll just before Canada legalized pot for recreational use almost three years back. However, since then these companies have been impacted by tepid demand that can be attributed to the slower than expected rollout of retail stores in major Canadian provinces.

This in turn led to high inventory levels, massive write-downs, and negative profit margins. A thriving black market further exacerbated these issues and the emergence of COVID-19 impacted demand as well.

A Canadian Cannabis stock that went public in July 2018 and is also popular on social-media platform StockTwits is Tilray Brands, Inc.. The company closed trading at 52 weeks high of $23.04 per share on June 9, 2021, and have since declined by a staggering -19.92% to currently trade at $4.82.

TLRY is one of the most followed companies on StockTwits with over 166.57k impressions. While StockTwits might not be the best source of quality investment analysis it provides us with a proxy for retail investment trends for a particular company. Given the rapidly expanding Healthcare market, TLRY stock might seem like the ultimate contrarian bet for investors, but it also carries significant risks.

Shareholder dilution for TLRY stockholders

As cannabis producers including Tilray Brands, Inc. are grappling with huge losses and cash burn, they have raised equity capital several times in the past resulting in shareholder dilution. In the last 6 months, TLRY issued 28.85M shares.

Analysts expect Tilray Brands, Inc. to narrow its losses to $-0.68 per share in 2022. However, given its outstanding share count, it suggests the company will post over $123.18M in profit on estimated sales of $513.09M in 2022.

TLRY ended the quarter with a balance of $376.3M giving it enough liquidity to improve margins over time. However, if the company aims to gain traction via acquisitions, it will need to raise additional equity capital to maintain a debt-free balance sheet.

In the Q2 of 2022, Tilray Brands, Inc. has issued 46,000 common shares at an average price of $4.82.

TLRY aims to pivot

In 2022, Tilray Brands, Inc. has looked to reduce its product portfolio and focus on high-margin items to improve its bottom line. While the Toronto-based company has tried several measures to improve its fortunes, including acquiring rival Aphira to create what has been called the “world's largest cannabis company,” nothing has been able to stop the slide in the share price.

Here, Tilray Brands, Inc. will provide growth capital to companies in the Healthcare sector and deploy capital strategically through direct and indirect investments.

In 2022, Tilray Brands, Inc.'s Healthcare sales stood at $513.09M which was higher by $122.09M than its year-ago revenue of $391M. However, its cost of sales stood at $122.39M indicating a negative gross margin.

In 2022, Tilray Brands, Inc.'s operating income was $-68.56M which was significantly lower by -70.49M than the prior-year loss of $1.93M.

TLRY stock is valued at a market cap of $2.66B which means its forward price to 2023 sales multiple is really steep making it a high-risk bet for investors.

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TLRY

Tilray Brands, Inc.

3.15

0
0.00%

Return

-34.91%
Change % Since Posting
-1.69
Change Since Posting
4.84
Price When Posted

Metrics

5.32
Target Price
7/ 10
Confidence
1-2 Months
Timeframe
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Earnings Per Share
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Financials
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Management
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Price to Earnings Ratio
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Dividend
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