Initiating Coverage: Tilray

The company leads in market cap and revenue within the TDR Canadian Cannabis Integrated Index, showing strong market presence. However, it has average metrics in COGS/Revenue, SG&A, and D&A, indicating room for efficiency gains. Its Free Cash Flow (FCF) and Levered FCF are below peers, highlighting the need for better cash management. Poor inventory (DIO) and receivables (DSO) performance suggest inefficiencies. Notable concerns include significant shareholder dilution and low TBVPS to Share Price ratio. The Beneish M-Score shows low earnings manipulation risk; however, the Altman Z-Score points to moderate financial risk. Projected 2024 revenue is $801 million with $5.6 million EBITDA. The ‘Buy’ rating and a target price of $3.28 imply a 71% return, backed by solid valuation metrics. The stock’s comparative and DCF values suggest a robust financial standing and optimistic growth prospects. Overall, we rate the company a ‘Buy’ with a one-year target of $3.28, representing a potential return of 71%.

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