Tilray (TSX: TLRY): A cheap pot stock to buy right now?

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 Tilray (TSX: TLRY): A cheap pot stock to buy right now?
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Highlights

  • Tilray (TSX: TLRY) saw a year-over-year growth of 23 per cent in net revenue in Q3 2022.
  • The smallcap pot company noted gross profit growth of 31 per cent in Q3 2022
  • TLRY stocks shot up by about six per cent in one month

Canadian investors seeking significant growth exposure could explore pot stock Tilray (TSX: TLRY) to benefit from the possible federal decriminalization of marijuana in the United States.

Senate Democrats reportedly plan to unveil the Cannabis Administration and Opportunity Act soon. If passed, this cannabis legislation that aims to remove cannabis from the federal list of controlled substances could mean increased market size for Canadian licensed pot producers like Tilray.

On that note, let us talk about this cannabis stock and closely examine its financials and stock performance.

Tilray Brands Inc (TSX: TLRY)’s Q3 FY2022 financial results

Tilray announced on Thursday, July 14, that its brand, CANACA, released the Wild West product lineup at Calgary Stampede. The smallcap pot producer also completed the transaction with Hexo (TSX: HEXO) under the previously stated strategic alliance.

Tilray reported a growing net revenue of US$ 152 million in Q3 2022, signifying a year-over-year (YoY) surge of 23 per cent. The cannabis company also posted gross profit growth of 31 per cent in the latest quarter compared to the previous year’s same quarter. As a result, it improved its net profit to US$ 52.47 million in Q3 2022, as against a loss of US$ 258.64 million a year ago.

Tilray Brands Inc (TSX: TLRY)’s Q3 FY2022 financial results

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Tilray’s stock performance

TLRY stocks shot up by about six per cent in one month and jumped up by approximately 12 per cent from a 52-week low of C$ 3.91 clocked on July 5. As per Refinitiv data, Tilray stock had a Relative Strength Index (RSI) value of 46.87 (near moderate level) at the time of writing on July 15.

On the valuation front, Tilray recorded a debt-to-equity (D/E) ratio of 0.16, signalling low financial risk.

Bottomline

If this marijuana bill comes into the picture, discounted cannabis stocks like Tilray can see an impact on their stock prices. Long-term investors could substantially explore TLRY stock to gain from the possible cannabis legalization and the growing marijuana market.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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