TLRY Stock Forecast 2019: How Tilray Inc Is Surpassing Pot Bigwigs Canopy, Aurora

TLRY stock forecast
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TLRY Stock Forecast for 2019

The most exciting marijuana stock of the year, without question, has been Tilray Inc (NASDAQ:TLRY). The first pure-play marijuana initial public offering (IPO) on a major U.S. stock exchange, Tilray has taken the world by storm. The TLRY stock forecast for 2019 is exciting.

The Tilray stock gains aren’t likely to stop dead in their tracks anytime soon. A number of factors—not least of which is the recent strong TLRY Q3 earnings report—have been paving the path toward higher stock prices.

Speaking of which, let’s dive into the numbers from Tilray’s latest quarterly earnings report.

Tilray’s Q3 revenue climbed by 85.8% year-over-year to $10.0 million, and by 78.9% year-to-date to $27.6 million. (Source: “Tilray, Inc. Reports Third Quarter 2018 Earnings,” Tilray Inc, November 13, 2018.)

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These revenue gains were said to be a result of higher patient demand, bulk sales to other licensed producers, and accelerated wholesale distribution in export markets.

The company also witnessed a massive year-over-year increase in total kilogram equivalents sold, from 684 kg to 1,613 kg.

The average net selling price per gram, however, fell year-over-year from $7.53 to $6.21. The company claimed that this price reduction was mainly due to an increase in bulk sales as a percentage of total revenue.

Tilray showed a net loss of about $18.7 million in the third quarter, which is not out of the ordinary for a young company looking to expand.

“The cannabis industry remains very robust and we are pleased with our revenue momentum and strategic achievements in the third quarter,” said Tilray CEO Brendan Kennedy.

And the financial numbers are only the tip of the iceberg. The TLRY stock forecast for 2019 is also hugely positive because of the company’s strong presence internationally.

As part of Tilray’s international expansion strategy, the company acquired Alef Biotechnology SpA for $3.9 million. This means the company can import, produce, and distribute Tilray-branded medical cannabis in Chile and create a hub for the distribution of its products throughout Latin America.

Considering that Latin America is projected to become a very lucrative marijuana market in the near future, this is a very good move for Tilray. It epitomizes the company’s aggressive pursuit of opportunities in the medical marijuana market, even as recreational pot sucks up most of the oxygen in the media.

Furthermore, Tilray has increased its imports of cannabidiol (CBD) oil to the U.K. and has expanded its medical marijuana business in Germany. This shows that the company has tapped into a number of very exciting markets.

Most importantly for Tilray’s international expansion plan, the company has received regulatory approval from the U.S. federal government to import study-grade medical cannabis for drug trials at the University of California San Diego Center for Medicinal Cannabis Research.

This is a huge first step for Tilray as it becomes one of the first companies to export cannabis to the United States. It means that Tilray is likely pursuing other opportunities in what is sure to be among the biggest marijuana markets in the world when federal legalization eventually arrives.

Why TLRY Stock Is Rising vs. CGC and ACB 

The highlights of the TLRY Q3 earnings report help show why the TLRY stock forecast for 2019 is as positive as it is; the company is making all the right moves.

That’s on top of being listed on the Nasdaq, which is a stock exchange more suited for volatile and nascent industries (compared to the New York Stock Exchange), due to the Nasdaq’s heavy experience with the tech industry.

The following chart shows the recent stock performances of TLRY in black, Aurora Cannabis Inc (NYSE:ACB) in blue, and Canopy Growth Corp (NYSE:CGC) in red.

Chart courtesy of StockCharts.com

The factors mentioned above, along with the investor excitement that built up over Tilray being the first marijuana IPO on a major U.S. listing, helps answer the question of why TLRY stock is rising vs. CGC and ACB.

Will the Tilray Stock Bubble Burst?

There are still concerns surrounding the TLRY stock forecast for 2019 that need to be addressed.

I’ll be the first to admit that there I was unsure of Tilray’s future. After all, the stock saw extremely rapid—perhaps too rapid—price increases in its first months on the stock market.

Tilray quickly became the largest marijuana company in the world by market cap, despite only being available for trades for a few months and not being projected to overtake giants like Canopy Growth and Aurora Cannabis.

And frankly, I’m not entirely convinced that Tilray stock is impervious to a regression.

While it has proven me wrong before (I anticipated that there would be a pullback in Tilray stock around this time), there is still a chance that Tilray’s rapid growth in stock value in such a short time period has left little room for further growth.

That is a genuine concern, and makes the TLRY stock forecast for 2019 among the most risky.

But—and this is a big “but”—there is a still a lot of goodwill surrounding Tilray stock among investors. It has the proper fundamentals in place to see huge stock growth moving forward, as long as investors don’t assign it the dreaded “overvalued” label that has destroyed marijuana stocks in the past.

Analyst Take

The TLRY stock forecast for 2019 shows a healthy risk-to-reward dynamic.

There are certainly safer picks in the marijuana industry, but Tilray stock offers investors a chance to see large returns.

It’s too early to tell with any certainty what the long-term future will be for the company because there’s both massive opportunity and risk with Tilray stock.