Can Tilray Beat Expectations?

The cannabis sector promises incredible future growth, but presently the industry is beset by problem after problem, sending shares of once high-flying stocks crashing back to the ground. And few stocks have been hurt as badly as Canadian medical marijuana company Tilray.

Since October 2018 Tilray shares have declined nearly 90%, falling from October 8, 2018, closing high of $165.64 a share to Thursday’s closing price of $21.86 a share.

Now the company is slated to report third-quarter financial results on November 12, and investors wonder if the stock has bottomed and might be ready to rally again on a strong earnings result.

Certainly, the company is expected to show strong revenue growth, with analysts expecting sales of $50.26 million, or 400% better than the same quarter last year, you might expect Tilray shares to be a strong buy. However the company isn’t profitable yet, and expectations are for a loss of $0.29 a share.

Even if Tilray can post a smaller loss or greater revenues, there are still the industry-wide problems to weigh on investor sentiment and the stock price.

There could be some hope for the stock based on positive management guidance though. One development that could help is the $100 million partnership with Anheuser Busch for the sale of CBD-infused non-alcoholic beverages, due to launch by the end of 2019. Another potential positive comes from the October 24 opening of Canadian sales of edibles and vaping products. Both could not only have a positive impact on revenues and profits but also on the oversupply issue.

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