Cannabis company Tilray Inc. (NASDAQ:TLRY) shares soared more than 27% on Wednesday after announcing its most recent quarterly results. The company posted a significant cannabis revenue increase in its fiscal Q4 report but missed analyst expectations on the total revenue.
The Nanaimo-based company posted GAAP earnings per share of $0.18. On the other hand, the top-line grew 25.3% year-over-year to $142.2 million, missing the consensus Street expectations by $88.1 million. Overall revenue received a significant boost from cannabis revenue, which soared 55% from the same quarter a year ago.
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Tilray completed a merger with Aphria in May. The company has since realized operational synergies of about $35 million and is on track for the $80 million targets within the first 12 months.
Should you invest in Tilray shares in Q3 2021?
Analysts are optimistic Tilray’s top line will maintain solid growth in the next few quarters to boost its bottom line. They expect earnings to grow by 32.70% this year before increasing by a whopping 82.20% next year. In addition, they also forecast EPS to grow at a compounded annual growth rate of about 49.30% over the next five years.
From a valuation perspective, Tilray shares trade at a price-sales ratio of 28.29, making the stock relatively expensive. However, its book value of 3.99 could be compelling to value investors that also target aggressive growth stocks.
Therefore, although TLRY stock popped 27% on Wednesday, it could still extend gains in the coming months.
Technical overview: Tilray rebound seems poised to continue
Tilray shares bounced back on Wednesday to trade above $16.00 per share. However, the stock price is yet to hit overbought conditions in the 14-day RSI, leaving more room for upward movement. Furthermore, TLRY still has room to advance before reaching the 100-day moving average.
Therefore, investors can target extended gains at approximately $19.94 or higher at $24.32. The key support levels are $12.09 and $7.89.
Bottom line: why invest in TLRY shares now?
In summary, although Tilray is yet to turn a profit on a trailing 12-month basis, it is not far off. In addition, the earnings growth projections could significantly boost the valuation, while the current bull run still seems to have more room to cover. Therefore, it may not be too late to invest in TLRY stock.
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