Is Tilray stock a buy or sell after missing FQ1 expectations?
- Tilray shares on Thursday spiked nearly 4% despite posting weak Q1 results.
- The company announced its most recent quarterly results before markets opened, missing analyst estimates.
- The company remains on course for $80 million in tax-saving benefits amid synergies from the Aphria merger.
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On Thursday, Tilray Inc. (NASDAQ:TLRY) shares surged nearly 4% after announcing its most recent quarterly results. The company reported its fiscal Q1 revenue and earnings before markets opened, missing analyst expectations.
The company posted a GAAP EPS of -$-0.08, missing the consensus Street expectation of -$0.06. However, revenue for the year grew by 43% to $168 million, $6 million ahead of expectations.
Tilray also said its adjusted EBITDA increased by 58% from the same quarter a year ago to $12.7 million. The company has now posted a positive adjusted EBITDA for the tenth consecutive quarter.
The company remains on track for $80 million in tax savings after realizing $20 million in actual cash amid synergies from the Aphria merger.
Tilray’s exciting growth prospects
From a valuation perspective, Tilray shares trade at a reasonable price-sales ratio of 9.80. Moreover, the company’s bottom line could grow significantly in the coming quarters resulting in profitability.
Analysts expect Tilary’s earnings per share to improve by 36.60% this year, before growing at an average annual rate of about 40% over the next five years.
Therefore, the company could be an exciting growth opportunity for long-term investors looking to capitalize on the rapid growth of the cannabis industry.
Time for a channel breakout?
Technically, Tilray shares appear to be trading within a descending channel formation in the intraday chart. However, the stock has recently traded closer to the trendline resistance, attempting an upward breakout.
Therefore, with shares still far from reaching overbought conditions, a breakout could be imminent.
As a result, investors could target upward profits at approximately $12.46, or higher at $14.73. On the other hand, if the trendline resistance remains unbreached, thereby triggering a pullback, the stock could find support at $8.45, or lower at $6.62.
Time to be on TLRY growth
In summary, although Tilray shares are up more than 24% this year and close to 116% over the last 12 months, this year’s rally seems poised to continue amid TLRY’s exciting growth prospects.
Therefore, with shares far from reaching overbought conditions, it could be time to bet on Tilray’s growth.
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