Some of Wall Street’s most favored cannabis companies have reported their newest financial results. In particular, today saw Tilray Inc (NASDAQ: TLRY) announce it’s recent Q4 results much to the anticipation of Wall Street. Most notably, quarterly revenues increased by 204 percent up to $15.5 million.
“2018 was a very successful year for Tilray with many corporate milestones. Our team made significant progress on our long-term initiatives including increasing production capacity, expanding and strengthening strategic partnerships and acquiring complementary businesses to accelerate our future growth and leadership position in medical and adult-use cannabis,” said Brendan Kennedy, Tilray’s President and CEO. “Looking ahead, we remain committed to pursuing global growth opportunities and will be disciplined in deploying capital, particularly in the United States and Europe, where we believe we have multiple paths for value creation.”
Asides from revenue growth, almost every figure across the board showed considerable increases. Total kilograms sold increase almost by three-times from 694 kilograms to 2,056 kilograms over a one-year period.
Average net selling price per gram jumped 40 cents, from $7.13 to $7.52 per gram, helping increase overall profit margins. However, net losses for the quarter was at $31 million, compared to the $3 million during the same time last year. However, most of this came from increased operating expenses due to various acquisitions, growth strategies, and expansions and are only one-time costs for the most part.
“Longer term, we continue to expect 50% plus gross margins as we lower our costs through greenhouse and outdoor cultivation, and as we ramp those facilities past the start-up phase. We also expect reduced revenue per unit as selling wholesale and the adult-use market becomes a bigger mix of our revenues,” Kennedy added in the company’s conference call. “We believe that over the long-term companies such as Tilray with the portfolio of trusted brands powered by multinational supply chain, will win the market by earning the confidence of patients, consumers and governments around the world.”
In terms of traditional financial metrics, Tilray is considered one of the more overpriced stocks from a fundamental perspective, selling at 70 to 80 times sales, only matched by another cannabis giant, Cronos Group (NASDAQ: CRON). While many look at these two giants as overvalued for what they bring to the table (in Tilray’s case, a market cap of $7 billion and projected yearly revenues between $30-50 million), there is still a case to be made that the price isn’t entirely unjustified.
Earlier in February, Tilray announced the acquisition of Manitoba Harvest for C$419 million, a company with $71 million last year in revenues. This figure is well above Tilray’s own revenues, and is seen as a good investment from a cash flow perspective.
In response to the news, Tilray’s shares actually dropped today, declining 3.4 percent.
Tilray Inc Company Profile
Tilray Inc is engaged in sale and development of medical cannabis. Geographically, the company derives majority of its revenue from Canada. The product categories of the company include dried cannabis which include whole flower and ground flower, and cannabis extract which include full spectrum and purified oil drops and capsules. – Warrior Trading News
