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Tilray Brands reports its Q1 on Wednesday. The stock, the worst-performing member of the NCV Global Cannabis Stock Index in September and now down 11.2% year-to-date, is very overvalued. With a $1.7 billion market capitalization, the company is still very significant to the cannabis sector, though it operates mainly outside of cannabis.
After the Q4 report in late July, the stock shot up when the company reported better-than-expected revenue. It left a gap from the $1.72 high the prior day, trading as low as $1.90. It traded subsequently to as high as $3.40 in early September:
The analysts are expecting Q1 revenue to rise 14% from a year ago to $174 million, a 5% sequential decline. Adjusted EBITDA is projected to fall about 50% sequentially to $11 million, down 16% from a year ago.
The Q4 report wasn’t so great in our view, and this quarterly report will not excite investors unless it beats again. The stock extended its rally when investors became more interested in cannabis stocks after the potential rescheduling of cannabis came out in late August, but the stock has actually declined slightly since that news. We believe that Tilray could post a new all-time low and suggest readers consider alternative Canadian LPs.
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Alan & Joel