Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Tilray’s EBITDA Set to Soar; Stock Price Next?

Published 08/24/2021, 03:02 AM
Updated 08/24/2021, 06:31 AM
© Reuters.  Tilray’s EBITDA Set to Soar; Stock Price Next?

© Reuters. Tilray’s EBITDA Set to Soar; Stock Price Next?

Tilray (NASDAQ:TLRY) stock appears poised to soar, along with the company's EBITDA, in the coming years. Here's a look at the Canadian cannabis company.

TLRY is focused on conducting medical cannabis research, along with the processing, distribution, and cultivation of products worldwide. The company also supplies cannabis products to pharmaceutical distributors.

It is the world’s largest cannabis company, with the operational scale and strategic footprint to compete effectively in the market. (See Tilray stock charts on TipRanks)

The company has established a network of consumer chains, thanks to its robust capital structure, highly scalable operational footprint, organized executive team, and passion for improving the quality of life of its customers. This author is bullish on TLRY stock.

Tilray's Valuation

While Tilray enjoys a lengthy growth runway, backed by current growth momentum, it still needs to grow into its valuation. While the company is profitable on a forward EBITDA basis, it is not expected to turn a GAAP net profit for the foreseeable future.

The EV/forward revenue ratio is pretty attractive at just 7.9, but the EV/forward EBITDA ratio is still quite high at 67.8. Fortunately, growth is expected to be strong over the next several years, with EBITDA expected to surge by 197.4% in 2021, 129.5% in 2022, and 66.9% in 2023.

Wall Street’s Take

From Wall Street analysts, Tilray earns a Moderate Buy consensus rating based on four Buy ratings, six Hold ratings, and zero Sell ratings in the past three months. Additionally, the average TLRY price target of $19.33 puts the upside potential at 44.6%.

Summary and Conclusions

Tilray is enjoying rapid growth, thanks to its strong presence in a dynamic-growth industry. EBITDA is expected to soar over the coming years, making the 67.8 EV/forward EBITDA ratio more palatable than it might otherwise appear.

Furthermore, Wall Street analysts are generally bullish on the stock. As a result, the current valuation looks pretty attractive. The stock looks like it could be a good buy.

Disclosure: On the date of publication, Samuel Smith had no position in any of the companies discussed in this article.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.