Growth by acquisition is meaninglesswhen the acquisitions and financing required massive share dilution. Of course your revenues increase if you buy more companies - but if your shares numbers increase as well, there's no value added on a per share basis.
Ventura can add 20 more companies to his list - doesn't do much good if Tilray just issues more shares to acquire them. It's the bottom line and cash flow - not Gross Revenues that matter.
https://seekingalpha.com/article/4651225-tilray-is-getting-high-share-supply
Revenue evolution
Traditional valuation methods such as discounted cash flow modelling are rather difficult to apply on Tilray. The company is not profitable and needs to scale up to reach profitability. Therefore, it is more reasonable to look at the revenue evolution and gross profit evolution to conclude if Tilray is growing fast enough and creating shareholder value.
To justify a growth valuation it goes without saying that a prerequisite is that the company is growing both revenues and gross profit. In 2021 gross profit and revenues jumped related to the Aphria merger. Post-merger revenue grew by ~22% in 2022 YoY% and stagnated in 2023.
This while gross profit was approximately stable. What's remarkable is that gross profit margin is only 24%, which is quite low compared to consumer staples
Of course, revenue growth and gross profit do not give the full story. Revenue growth can be bought by acquisitions or capex spending (or both). As stated before, acquisitions were largely financed by share issuance. Revenue and gross profit per share show the dilutive effects of share issuance.
Apart from the initial growth sprint in 2019, both revenues and gross profit on a per share basis have not increased over the last 5 years.
Based on these numbers and to my opinion there was no value creation by Tilray whatsoever during this period. When reading through their last quarterly reports, it is worth noting that Tilray never reports revenue growth on a like-for-like basis or mentions the proportion of organic growth versus external growth. This adds a layer of mist on the financial number and is a red flag.
That might suggest that there is very little organic growth, and revenue growth is mainly due from acquisitions. In 'good' quarters Tilray reports around 20% revenue growth. This is too low to justify a growth stock valuation (based on revenues).
A last important point is that gross profit does not equal net profit.
The company has reported losses year after year since 2019. Besides the relatively low gross profits, the income statement reveals high SG&A costs.
In the last two years SG&A costs totalled around $ 200 M. or approximately 30%. Tilray's cost structure is inherently unhealthy and does not allow the company to become profitable in the near future even when gross profits would increase considerably.