Tilray (TLRY 6.98%) CEO Irwin Simon made a bold prediction last year when he said his aim for the new company formed when it combined with fellow cannabis grower Aphria was for $4 billion in annual revenue by the middle of 2024.
That goal seems particularly ambitious after the company just reported its third-quarter fiscal 2022 performance and showed it has generated just over $475 million in the last nine months. That disparity also partially explains why Tilray shares are down about 65% in the last year. But after the company just reported a surprise profit in its most recent quarter, investors may be wondering whether now is a good time to buy Tilray stock.
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Tilray is growing its core marijuana business, but Irwin also plans to use acquisitions to help grow the business to hit the revenue goal. The company reports that several of its recent acquisitions are also now profitable. Its U.S. subsidiaries, including hemp producer Manitoba Harvest, craft brewer SweetWater Brewing, and Breckenridge Distillery, are all profitable, according to the company's financial release.
Tilray's cannabis revenue grew 32% year over year in the most recent quarter. Cannabis represented 39% of total revenue over the last nine months. Simon believes that portion of the business still has plenty of room to grow globally. Tilray leads the sector with more than 10% market share in Canada's cannabis market. It also has 20% market share for medical marijuana in Germany, and overall cannabis sales in the Europe, Middle East, and Africa (EMEA) region jumped 37%.
Along with its earnings report, the company also announced a new partnership for Manitoba Harvest's hemp powder to be sold in more than 300 Whole Foods Market grocery stores across the U.S. and Canada.
If Tilray hits Simon's goal of $4 billion in revenue two years from now, it will be trading at a price-to-sales ratio of 0.875. That's certainly inexpensive, but the company has a very long way to go to get there. It will likely be a volatile stock along the way. For those who want to bet on the company and its CEO's vision, however, today's announcement didn't bring any negative news.
