Aphria: Avoid After Another Ugly Quarter
Heading into the (TLRY) merger close, (APHA) reported a horrible quarter. The company further confirmed why overpaying for Canadian cannabis stocks is never warranted. My investment thesis remains negative on Aphria and the new entity despite a nearly 50% dip from the peak in February.
Read the full article on Seeking Alpha.
Update - May 3
The deal closes with the new Tilray having a $8 billion valuation. The current FY revenue target is only $790 million, but the numbers include $350 million in non-cannabis revenues. The company just isn't the cannabis powerhouse that most think.
Tilray was a $10 stock back in November before the U.S. elections and the company doesn't benefit from U.S. legislation. The stock has a ton of downside risk here, especially after Aphria bombed the last quarter.
Update - April 28
Do not follow these analysts still focused on the Canadians for U.S. legalization.
The stock valuation is close to $8B and the BofA analyst only forecast $30M in EBITDA next year. The new Tilray will trade at over 60x '22 EBITDA estimates.
Disclosure: No position mentioned. Please review the disclaimer page for more details.