Shares of Tilray Brands (NASDAQ:TLRY) dipped at the time of writing despite posting better-than-expected revenue for Q1 FY24. The Canadian cannabis company said it is having a remarkable year and plans to do much better.
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What do the numbers tell us? The company reported revenue of $177 million, up 15% year-on-year for Q1. Out of this figure, its Cannabis business raked in $70 million, a 20% year-over-year growth, while the Distribution divisions brought in $69M to 14% year-over-year growth. Furthermore, the company’s Beverage alcohol net revenue improved by 17% to $24M.
This year, the company has focused on diversifying its business and scooping up major and small-scale competitors. In July, Tilray Brands acquired Canadian rival Hexo Corp. and bought out Truss Beverages in August. So far, the diversification bet seems to have paid off, going by the numbers posted.
Most of its reported revenue came from improved gross margins in its beverages and distribution business. On the other hand, the company’s Cannabis gross margin fell from 51% in the prior-year period to 28%.
Not only that, the company said it has picked up market share and became the 5th largest craft beer brewer in the United States. The company previously sat at 9th.
Despite the positive numbers, the firm’s net earnings fell short of analysts’ forecasts. Nonetheless, management has recommitted to its adjusted EBITDA guidance of $68M to $78M for FY24, equating to a projected growth rate of 11% to 27%.
Is Tilray Brands a Good Stock to Buy
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Tilray Brands stock based on two Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Nevertheless, the average price target of $2.55 per share implies a 16.97% upside potential.