Tilray (TLRY) - Overvalued Vice Stock?
Technically, Tilray doesn't appear to be doing anything at the moment, except comfortably sitting in a wedge. Volume has dropped off considerably, which further signals complacency with the stock.
If you were lucky enough to guess right and hold since the IPO, then you would be sitting on a 500+% gain, give or take, based on your entry price.
Currently, support looks to be around its 50 DMA of $101.74 and resistance about $175. The resistance was set as a Fibonacci bounce after its drop from $300 to $97.
Putting technical analysis aside, fundamentals should have you scratching your head, unless lost in a delusional world in which financial projections consider only the best case scenarios, on a accelerated timeline and price to perfection.
EV is around $13.5b at the $145 price, but at $175 parallels the EV of Dominos Pizza (DPZ), Papa John's (PZZA) and Wingstop (WING), COMBINED! These well-established companies have fought hard to achieve these valuations.
True, these companies are not comparable in terms of potential market expanse, but pause and consider the cannabis market as fiercely competitive, as both legal and illegal market forces battle out for market share. Does Tilray hold competitive advantage and is management experienced enough to navigate its future toward the necessary financial metrics to justify its valuation?
Similar to Bitcoin stocks, the list of publicly traded companies riding the marijuana movement is saturating the market and spreading investment dollars ever so thin. Run a simple Google search on "cannabis stocks" and you'll notice a lot of obscure names.
Exercise caution here is what I'm suggesting. TLRY could be the #1 company in its market, stave off competition and achieve excessive profits for years to come, but also keep in mind what other things $15b-$20b could buy you.
Remember the .com bubble and Webvan!
Comments welcome.