What happened

Shares of Tilray (TLRY) fell 14% on Thursday following the cannabis company's fourth-quarter results. 

So what 

Tilray's revenue rose 20.5% year over year to $56.6 million. A 49% jump in Canadian adult-use sales and a 191% surge in international medical marijuana sales fueled the gains, which were partially offset by an 18% decline in hemp revenue.

A downwardly sloping line.

Tilray's stock declined sharply on Thursday. Image source: Getty Images.

Notably, Tilray's profitability improved as it scaled its revenue base. Its adjusted gross margin increased to 33% from 23% in the year-ago quarter, due in part to Tilray's cost-reduction initiatives. That resulted in a significantly smaller net loss of $3 million, or $0.02 per share, compared to a loss of $219.8 million, or $2.14 per share, in the prior-year period.

Now what

Despite its solid operational progress, some analysts suggested that investors should hold off on buying Tilray's shares until it completes its impending merger with Aphria (APHA). The deal, which is expected to take place in the second quarter, will create the largest company by revenue in the cannabis industry. 

Moreover, several analysts cautioned that Tilray's stock may have run up too far ahead of its merger with Aphria. On Thursday, Piper Sandler analyst Michael Lavery cut his rating on Tilray's stock from overweight to neutral, citing valuation concerns.