Tilray (TLRY) falls 12% after hours as quarterly revenue declines

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Tilray (NASDAQ: TLRY) shares fell 12% in after hours trading after Q4 revenue declined 20% sequentially.

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Revenue for the full-year increased to $167 million ($217.4 million) up 287% year-over-year. Adult-use revenue increased 7% year-over-year. Tilray also announced the close of a $60 million dollar senior credit facility.

Without looking at the fancy numbers in year-over-year revenue growth, Tilray continues to have a difficult time generating profit on an adjusted EBITDA basis. Q4 revenue was also down 20% sequentially. The company’s losses are rising at an alarming rate, as the cannabis sector continues to struggle and compete with the black market.

Tilray’s net loss for the year was $321.2 million compared to $67.7 million, the same year prior. The Company recorded non-cash charges of $112.1 million related to impairment of the Authentic Brands Group LLC (“ABG”) agreement as well as $68.6 million in inventory reserves. Adjusted EBITDA loss for the quarter was $35.3 million compared to $13.3 million in the same year prior. Tilray attributed quarterly losses ”primarily due to increases in operating expenses related to growth initiatives, expansion of international teams, and the addition of Manitoba Harvest and Natura Naturals businesses.”

The cannabis sector has been under fire lately as LP’s (Licensed Producers) losses continue to widen. Many of them have reported mixed earnings results, unsustainable cash burn rates and rising debt.

There are only a handful of cannabis LP’s: Village Farms (VFF), Aphria (APHA), Canopy Growth (CGC), Cronos Group (CRON) who have a substantial amount of cash to last for the next few quarters. This will lead to LP’s inevitably raising more cash and further diluting shareholders. Tilray (TLRY) currently has $96,791M in cash and cash equivalents. You can expect Tilray to raise more cash by Q3 of 2020.

Brendan Kennedy, CEO said in a statement: ”Tilray has a diversified business model comprised of global medical, Canada adult-use and hemp products which positions us well in the current volatile market environment. We are still in the early days of this emerging growth industry and will continue being good stewards of shareholder capital as we aim to build the world’s most trusted and valued cannabis and hemp company”

Tilray’s Stock Performance

Tilray (TLRY) YTD performance is (-10.39%), its 3-month performance is (-19.25%), and its 1-month performance is (-12.49%). Tilray’s RSI (Relative Strength Index) is 40.12, meaning the stock is neither overbought nor oversold. Relative strength is a momentum indicator that measures the magnitude of price changes to evaluate overbought, or oversold conditions. An RSI over 70 is considered overbought, while an RSI below 30 is considered oversold.

Fundamentals

Tilray has a market capitalization of 1.53 billion. They have roughly $83.02M shares outstanding, with a float of 7.33M. Tilray has trailing twelve month sales of 126.87M with a price to book ratio of 3.51.

In the last twelve months, the company delivered a return on assets of -10.58% and a return on equity of -43.73%. The trailing twelve month price to sales ratio is valued at 9.12.

Tilray has an institutional ownership of 15.06%.

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About Tilray

Tilray is a Canadian pharmaceutical and cannabis company, incorporated in the United States and headquartered in Toronto, Ontario. Tilray also has operations in Australia & New Zealand, Germany, Portugal, and Latin America. Tilray (TLRY) is a global leader in research and development, production and distribution of cannabis and cannabinoids worldwide.

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