Tilray Stock Drop Stems From Steep Quarterly Loss

Tilray Inc (NASDAQ:TLRY) reported its earnings last night and its shares seem to be in for a dismal day as a result. The cannabis supplier reported a fourth-quarter loss of $1.02 per share, much steeper than the estimated loss of 35 cents. TLRY's reported revenue of $46.94 million also arrived much lower than anticipated $55.38 million.

Tilray's CEO Brendan Kennedy noted "like our peers, we have faced industry challenges, but we remain committed to driving long-term value for our shareholders." In response to the dismal report, Eight Capital downgraded the stock to "neutral" from "buy," while seven other brokerages issued price-target cuts, including to $14.50 at Stifel.

As a result, Tilray shares are down 12.6% to trade at $13.41 at last check, and earlier hit a record low of $13. Tilray is now down 22% year-to-date, and has consistently met resistance at the 50-day moving average. Today's flurry of bear notes are nothing new; thirteen out of sixteen analysts are considering a "hold," a lukewarm bearish indicator. 

In the options pits, Tilray sports a 10-day call/put ratio of 12.62 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 100th percentile of all other readings from the past year, meaning the rate of call buying is extremely high at the moment. However, given that 13% of TLRY's total available float is in the hands of short sellers, it's possible that a lot of this call buying could be shorts seeking an options hedge against any unexpected upside.

It should be noted though that TLRY's Schaeffer's Volatility Scorecard (SVS) sits at a low 18 out of a possible 100, indicating that Tilray's stock has tended to make smaller moves than what the options market has priced in.