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Initiating Coverage: Tilray

By Bill McNarland

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%.


Bill McNarland

Bill (William McNarland, CFA) has over 25 years of experience in complementary areas of the capital markets, encompassing private equity and credit due diligence, economic and stock research and corporate finance. He has served on the boards of six different companies and has fulfilled roles as a Trustee and member of the Investment Review Committee for regulated investment funds. Having completed nine degrees and designations, with a notable distinction as a Chartered Financial Analyst, Bill is currently advancing his academic pursuits with a Master's in Psychology. Furthermore, he is a published author of seven books, all of which are available on Amazon.

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