Breaking News

Buy Marijuana Stocks, Tilray & Aurora Cannabis, Before Earnings?

By Zacks Investment ResearchStock MarketsMay 09, 2019 03:24AM ET
Buy Marijuana Stocks, Tilray & Aurora Cannabis, Before Earnings?
By Zacks Investment Research   |  May 09, 2019 03:24AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

The marijuana industry has transformed from a widespread illegal market into a booming multibillion-dollar legal industry, with companies from Scott’s Miracle Grow (NYSE:SMG) to GW Pharmaceuticals (NASDAQ:GWPH) set to make money of the legalization of cannabis. With that said, the legal pot industry is still in the early stages, so let’s see if investors should consider buying some pure-play marijuana stocks heading into earnings.

Quick Overview

Cannabis has been legalized in some form in 33 states plus D.C. and it is completely legal in Canada for recreational and medicinal use. The industry is set to skyrocket from $9 billion in 2017 to an estimated $32 billion by 2020. As we mentioned, huge public companies such as Scott’s Miracle Grow, Molson Coors (NYSE:TAP) , GW, Altria (NYSE:MO) , and Corona brewer Constellation Brands (NYSE:STZ) have all made bets on the future of legalized marijuana in some form or another.

For instance, Constellation has invested roughly $4 billion into Canadian marijuana grower Canopy Growth (NYSE:CGC) . Meanwhile, GW has seen continued success its cannabis-based epilepsy drug Epidiolex in phase 3 clinical trials. Epidiolex is already approved by the US FDA for two rare forms of epilepsy, but is still pending approval for a larger set of seizure disorders that could represent a huge windfall.

On top of that, marijuana REIT, Innovative Industrial Properties (NYSE:IIPR) , reported better than expected results earlier this week. The company now controls more than 1.3 million square feet of growing facilities. Meanwhile, shares of Canadian marijuana producer Cronos (NASDAQ:CRON) have fallen over 20% in the last month in the lead up to its earnings, which were released on Thursday, May 9, based mostly on fears that the market for recreational sales of cannabis in Canada will continue to disappoint, as regulatory roadblocks constrain supply.

Cronos topped our Zacks Consensus Estimate for adjusted earnings and saw its quarterly revenue soar 120%. Yet, shares of CRON fell over 8% through early afternoon trading. Therefore, some investors might have hoped for a larger climb as pot wasn’t fully legal in Canada in the year-ago quarter. The Toronto-based firm’s revenue did pop 15% quarter-over-quarter.

As we touched on already, we are still in the very early days of the marijuana industry and stocks have fluctuated somewhat wildly. So, let’s take a look at what to expect from Tilray and Aurora Cannabis next week to see if investors might want to dip their toes into the market and buy some pot stocks.


Tilray, which reports its Q1 fiscal 2019 financial results on Tuesday, May 14, is essentially a marijuana grower. The British Columbia-based firm researches, cultivates, produces, and distributes cannabis and cannabinoids to twelve countries. Shares of TLRY are up over 100% since the company went public last summer, but are down 35% this year and are currently trading for roughly $46 a share.

Looking ahead, the company is projected to report revenue of $20.93 million, based on our current Zacks estimates. Tilray is also expected to report an adjusted quarterly loss of $0.25 per share and has seen its earnings revisions trend in the wrong direction. The company has also missed bottom-line estimates by over 90% in two out of the last three quarters.

With that said, Tilray’s full-year revenue is projected to skyrocket 365% to $200.9 million. Despite the projected top-line growth, its fiscal 2019 earnings are expected to fall by 56%.

Aurora Cannabis (TO:ACB)

Like its grower peer, Aurora Cannabis is set to report its third-quarter fiscal 2019 results after the market closes on Tuesday, May 14. The Edmonton, Alberta, Canada-headquartered firm hopes to benefit from the relatively quick expansion of the legalized recreational marijuana business. ACB stock is down roughly 22% since Aurora went public. Yet, shares of Aurora have soared 70% in 2019 to rest at around $8.45 per share.

The company’s quarterly earnings are projected to jump 25% from a loss of $0.04 per share in the prior-year quarter to $0.03 a share. More impressively, the company’s revenue is projected to skyrocket roughly 300% to $50.9 million, fueled by Canadian legalization. Peeking ahead, the company’s adjusted full-year EPS figure is projected to tumble 250% on 360% revenue expansion.

Bottom Line

In the end, investors should remember that these marijuana pure plays aren’t widely covered by analysts just yet, which can cause big quarterly beats and misses. Pot stocks have also seen their prices go on a roller coaster rides as demand often can’t match supply. Therefore, most marijuana stocks should be considered home run-type picks that could go boom or bust over the next several years—which doesn’t mean you shouldn’t take a few swings.

The Could Be the Fastest Way to Grow Wealth in 2019

Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.

These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.

Click here to see these breakthrough stocks now >>

Molson Coors Brewing Company (TAP): Free Stock Analysis Report

Constellation Brands Inc (STZ): Free Stock Analysis Report

GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report

The Scotts Miracle-Gro Company (SMG): Free Stock Analysis Report

Altria Group, Inc. (MO): Free Stock Analysis Report

Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report

Cronos Group Inc. (CRON): Free Stock Analysis Report

Tilray, Inc. (TLRY): Free Stock Analysis Report

Aurora Cannabis Inc. (ACB): Free Stock Analysis Report

Canopy Growth Corporation (CGC): Free Stock Analysis Report

Original post

Zacks Investment Research
Buy Marijuana Stocks, Tilray & Aurora Cannabis, Before Earnings?
Buy Marijuana Stocks, Tilray & Aurora Cannabis, Before Earnings?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email