We feel now is a pretty good time to analyse Tilray Brands, Inc.’s (NASDAQ:TLRY) business as it appears the company may be on the cusp of a considerable accomplishment. Tilray Brands, Inc. engages in the research, cultivation, production, marketing, and distribution of medical cannabis products in Canada, the United States, Europe, Australia, New Zealand, Latin America, and internationally. The US$1.9b market-cap company announced a latest loss of US$434m on 31 May 2022 for its most recent financial year result. As path to profitability is the topic on Tilray Brands’ investors mind, we’ve decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Tilray Brands
Tilray Brands is bordering on breakeven, according to the 15 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$20m in 2025. Therefore, the company is expected to breakeven roughly 3 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 99% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We’re not going to go through company-specific developments for Tilray Brands given that this is a high-level summary, but, keep in mind that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 14% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Tilray Brands, so if you are interested in understanding the company at a deeper level, take a look at Tilray Brands’ company page on Simply Wall St. We’ve also compiled a list of pertinent factors you should further examine:
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Valuation: What is Tilray Brands worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Tilray Brands is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tilray Brands’s board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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