Tilray Gains on Aphria Merger, Global Cannabis Operations

17 Sep 2021

Tilray Gains on Aphria Merger, Global Cannabis Operations

. Tilray Gains on Aphria Merger, Global Cannabis OperationsTilray (NASDAQ:TLRY) is a large-scale Canadian cannabis LP with global operations.It holds first place among other cannabis producers in geographic footprint, and Canadian cannabis market share. The company significantly increased its size and revenue through a recent merger with Aphria (NASDAQ:APHA), another large Canadian LP.Tilray made news when its stock rose from $7 per share to $67 per share between January and February of this year. The stock price currently sits around $12 per share, as investors digest its new valuation and long-term potential. (See TLRY stock charts on TipRanks)Although its stock has been down over the summer, I maintain a bullish rating.Tilray’s OperationsThe company holds the No. 1 market share in the Canadian medical and recreational cannabis markets. It maintains grow and processing facilities in Ontario and British Colombia, from where it distributes a variety of cannabis products through a myriad of brands in all provinces. In Manitoba, it has a hemp/CBD grow and processing plant from where it sells hemp-based health products in Canada and the United States. In Europe, Tilray maintains cannabis grow and processing facilities in Portugal and Germany, from where it exports cannabis products as far as Australia, New Zealand, and Israel. In addition, it has cannabis operations in Italy and Poland, with positioning for operations in the U.K., Spain, and France. The company is currently developing operations in Argentina, with eyes set on Latin American expansion.The company owns SweetWater Brewery, the 11th-largest craft beer brewer in the United States. Tilray has other plans for United States expansion as well.The company recently acquired the majority of outstanding convertible senior notes of the American based cannabis MSO, MedMen (MMNFF (OTC:MMNFF)). Upon federal legalization, Tilray has a right to a majority interest in the company.Q4 2021 Earnings Post Aphria MergerTilray reported Q4 net revenue of $142.2 million, showing a 25% increase compared to the prior year’s quarter. Gross profit was $22.5 million. The revenue report only represents one month’s performance since the company's merger with Aphria. The revenue total breaks down into the following segments: Cannabis ($53.7 million), Distribution ($66.7 million), Alcoholic Beverages ($15.9 million), and Wellness ($5.8 million). The company reported a net income of $33.6 million, compared to a net loss in the prior year’s quarter. It has $488.5 million in cash, with current assets of $883.6 million, and total assets of $6 billion. Its current liabilities are $401.2 million, and total liabilities are $1.6 billion.The company’s estimated quarterly revenue for Q1 2022 is $180 million.Wall Street Price Target (NYSE:TGT)According to Wall Street, Tilray has a Moderate Buy consensus rating, based on three Buys and seven Holds assigned in the past three months. At $16.77, the average Tilray price target implies 39.6% upside potential.ConclusionIn conclusion, cannabis-minded investors should keep an eye on Tilray.The company holds the largest geographical footprint in the cannabis industry, and operates in multiple nations. Besides medical and recreational cannabis, the company operates in craft brewing and the CBD/wellness markets.Its revenues after the Aphria merger have significantly increased, and the company has more revenue synergies to look forward to in the future.Disclosure: At the time of publication, Alan Sumler had a position in Tilray.Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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