What happened
Relatively encouraging financial results from a peer lifted sentiment on Canopy Growth (CGC 2.41%) stock on Wednesday. The Canadian marijuana company's share price leaped 10% higher on the day, easily topping the 0.8% increase of the S&P 500 index.
So what
That peer was fellow Canadian marijuana company Tilray Brands (TLRY 1.71%), which reported its first quarter of fiscal 2024 results before the market opened. The company managed to boost its net revenue by 15% year over year to $177 million, notching a new quarterly record. It also narrowed its net loss, to $56 million, from the first quarter of fiscal 2023's $66 million deficit.
That represented a mixed quarter for Tilray, as it barely missed (by $0.02) per share the average analyst estimate for net loss, but topped the consensus for revenue.
Marijuana investors are used to their companies posting awful results, full of weak growth and steep bottom-line losses. Considering that, Tilray's performance was better than many had the right to expect. Although the company -- unlike Canopy Growth -- is attempting a pivot (in its case, into the beverage sector), marijuana is still key to its fundamentals. Happily, cannabis net revenue enjoyed a sturdy 20% increase for the quarter.
Now what
Canopy Growth, of course, is not Tilray. Yet with its weed operations, it toils in the same business, so if Tilray's business is improving, it's very likely Canopy Growth's is headed in the same direction.
On top of that, optimism is in the air with cannabis stocks, with lawmakers in the neighboring U.S. pushing to both de facto legalize marijuana and provide access to basic financial services for pot purveyors.
