TILT Holdings TLLTF Stock Forecast & Analysis

TILT Holdings, TLLTF stock is a stock that gets a lot of attention on social media.  There really is nothing exceptional about TILT Holdings that would drive this attention.  Just like the other 108 stocks on the website I cover here, TILT Holdings has products and they have a plan.  Oddly, and despite the kerfuffle that many give TILT Holdings, TLLTF stock simply does not have a valuation that makes sense.  So, I wanted to walk through TLLTF stock and do the TLLTF stock forecast & analysis with price target.

I do want to point a few things out.  First, the social media.  After doing this analysis, it makes no sense that TLLTF stock is down as low as it is.  This is a solid company.  And, considering the number of individuals that cheerlead for this stock, one would think it is highly improbable that the stock would be so head-scratchingly low.  But, it is.

When Cannabis Stocks Hit

Given the fact that I see cannabis stocks being so low, it is important to point out that we are very likely on the cusp of something extraordinary occurring with cannabis stocks.  Cannabis stocks have been obliterated the past year.  In fact, all stocks are down now that the Federal Reserve is starting to put into place aspects of taming inflation, increasing interest rates and removing policy liquidity.

But, very likely, we are about to see the Senate introduce their version of cannabis legalization.  They are meticulously writing out a new bill that could potentially change everything.  The bill will have bipartisan inclusion as Senator Schumer has reached accords the aisle to other Senators for input.  Those other Republican senators likely are cannabis legal in one form or another.  Keep in mind, 38 states have some form state legalization.  Is it more than 38 already? I can’t keep track.

Regardless, with the stock market down as bad as it is, and with something potentially brewing in cannabis stocks, this could really invigorate the masses into buying up cannabis stocks, and likely handing short sellers their backsides as they rush to cover.

Then, the TILT Holdings social media legion will kindly offer some advice as to which cannabis stocks are likely to perform the best.  Maybe they will even point out this video and analysis, and use that as proof of potential.

As the stock starts to move upward, short sellers covering, new buyers rushing in, a frenzy will ensue.

Feedback loop

All Schumer will have to do is merely introduce a bill.  Absolutely, he will tell anyone who listens that there was a tremendous amount of work involved in getting this introduced, that it is comprehensive, and that many Republicans gave input.  And, so it will begin.

TILT Holdings Without The Noise

Despite the potential of what any cannabis federal legalization can provide, TILT Holdings itself has its own merits.  However, and for no real unknown reasons, TILT Holdings is undervalued in a disproportionate way.  All cannabis stocks are undervalued but, not as much on a relative basis as TILT Holdings.  And, I have no idea why.  It just is.

TILT Holdings has some offerings that are slightly different than others such as their vape products.  These products are being offered to other companies and that business will grow.

In the meantime, infamously, I do not consume cannabis… despite the fact that my birthday is 4/20 and that I run this site.  I do consume cannabis financial data.  And, if a company actually does have a product portfolio that does well in the broader market then, this will strike a cord with me.

That being said, TILT Holdings lost their backside with a revenue decline in the latest quarter.

More on the horizon

TILT Holdings are going to be opening a few dispensaries which, this foundation will drive future revenue.  Plus, with the vape business building up with other cannabis companies, revenues will continue to grow.  That foundation appears to be forming and will grow.

Originally, the calls for TILT revenue were for approximately $255M to be printed this year.  However, TILT is behind the 8-ball, so to speak with its recent decline in revenue.  This may be problematic when you consider that the models being priced first require TILT Holdings to hit their respective revenue goals in order for TLLTF stock to achieve its goals.

I have lowered my revenue expectations with TILT for this year.  This has brought the price levels down for the target price (Below in the TLLTF future projections)

But, TILT Holdings also has to be able to hit margin levels.  For now,  gross margins are on the softer side but, economies of scale on increased products moving out the door will improve that.  Then, operating efficiencies are actually nicely positioned and, increases in gross revenues are going to improve this even further.

Ultimately, TILT Holdings is still early in its growth stage and will get there.  This is the story of many cannabis stocks.

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TILT Holdings Financial Data

Here is the latest financial data on TILT Holdings and what I am using to analyze them.  I will update as often as possible.

TILT Holdings Gross Profits

  • TILT Holdings Revenue

For the first quarter, there was a large drop in revenue.  Management attributed this to some headwinds.  But, management is also confident that TILT Holdings will print their $255M this year.  They will be behind the 8-ball for the next three quarters.  However, with dispensary openings getting on their way, if these businesses scale up then, expect TILT Holdings to hit its mark.

With increased dispensaries, this translates into increased opportunities for gross margin improvements.  Scaling up dispensaries will mean that grow facilities will service more customers through these dispensaries.  Pushing more product through their systems will mean costs will be spread out over more products and, gross margins will improve.

This is the beauty of where some of these cannabis stocks are at this point. All of the difficult work is now behind them and building up larger and larger businesses is what is happening.

TILT Holdings Operating Profits

  • TILT Holdings Operating Costs

Operating profits are fairly in line with where most other cannabis companies are.  In fact, with the doubling of revenue over the next few years, operating efficiencies will have the ability to improve even further. Operating costs, on a relative basis, tend to be closer to 17.5% for the S&P 500.  But, for now, and because a lot of cannabis companies are still gearing up and building their respective foundations, cannabis numbers tend to be around 30% – 35%.  The better companies are already hitting below this, and these are cost conscience companies that you would want to keep an eye on.

Whereas there is likely to be bigger improvements in gross margins, look for marginal gains here as revenue climbs.  This will be a spot where an investor will be able to see the ability for the stock to improve as these costs, on a relative basis, continue to improve.

TILT Holdings EBITDA & Net Profits

  • TILT Holdings EBITDA

Scaling up will get TILT Holdings closer to profitability on a consistent basis.  This is the consistent story for many of the cannabis stocks out there that are nearing this stage. EBITDA profitability is a small way away but, potential.  Here, I show how EBITDA is valuable and how this will affect all stock movement.

I used a softer number going forward with the EBIT numbers in the projection below.  My expectation is that TILT Holdings hits roughly 20% of revenue for this year.  From there, with continued scaling up, revenue will climb and I put EBIT rates at 30% for the final year.  The average for the S&P 500 is roughly 22.5%.

TILT Holdings Cash On Hand

  • TILT Holdings Cash on Hand

I would love to see a lot more cash on hand.  Cash is oxygen to a company that is unprofitable.  Cash is what is necessary to fund operations and keep a business afloat.  Given this, the Cash:Debt ratio is lower than most.  This is somewhat of a concern but, TILT Holdings does have enough equity that they will have access to cash and be able to raise what they need.

However, scaling up is key to the next phase for TILT Holdings.  If they can scale up, achieve a higher rate of EBITDA/Revenue, and even achieve net earnings profitability, then they will also be able to pay down debt as they will not be taking on more.  Plus, with the dispensaries opening, this will be further assets that can be added to their portfolio.  This will give TILT Holdings the ability to leverage its future and borrow against, expanding its foundation even further.  But, for now, TILT Holdings’ cash on hand is low on a relative and foundational basis.

TILT Holdings Total Equity

  • TILT Holdings Total Assets

One of the key indicators that I look for in a stock is total equity.  I always want to see increasing total equity.  The reason is simple: This will generate increasing revenues and, by extension, increasing profits.  TILT Holdings will get there.  But, for now, and until they get a better profitability track going, TILT Holdings is seeing declining total equity.

But, with opening dispensaries and other things going on with the company, revenues will increase and this will allow TILT Holdings the ability to bring in free cash flow.  The dispensaries that will be opened soon and those that are coming to scale, are going to add to total equity.  So, I do see changes here coming.

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TILT Holdings TLLTF Stock Forecast

TILT Holdings TLLTF Stock DCF

For now, TILT Holdings is just shy on EBIT revenue metrics.  So, I started out progressively slower with margins easing the company along.  But, as economies of scale continue to increase via bigger revenue increases, this will translate into the numbers playing out.  TILT Holdings will get there, along with many cannabis stocks for those holding these stocks.

I used a very soft number for the EV/EBITDA metric.  When you consider the cohorts owning this stock, using 30 was very soft on my part.  You start pushing this number higher to about 40, 50, or higher, and then TLLTF stock starts trading above $10.00 a share.

TILT Holdings does not have a ton of debt considering where they are and this metric really helps out with the stock hitting this target.

Is TILT Holdings TLLTF Stock A Good Investment?

TILT Holdings TLLTF Stock Forecast & Analysis

Like all cannabis stocks, TILT Holdings is undervalued.  But, and as I mentioned, TILT Holdings is undervalue a lot more than the average. And, as I also have stated, I have no idea why TILT Holdings is disproportionately lower than many other cannabis stocks.  But, TLLTF is an opportunity that will pay well over many years’ time.  The eventuality is that the process plays out, that cannabis companies will build their respective foundations, build revenues, and eventually get to profitability.

And, the Federal government, in some capacity or another will allow for cannabis companies to do banking as well as up-list to the big boards.  This is a process and, these cannabis stocks will get there.

Then, this process will unfold in a way that means cannabis stocks will be bought up by very big players such as retirement funds and hedge funds.  This will be very supportive of cannabis stocks broadly.  That alone is what will drive the future of these stocks.

In the meantime, when you break down the potential of cannabis stocks, you see the long term opportunity of holding on to something with massive upside potential.

TILT Holdings has a great deal of upside.  They will increase their foundation and build up a solid business.  They will achieve profitability.  And, this will be a cash cow opportunity.  Considering where TLLTF stock lay at this point, the downside is minimal.  The upside is enormous.

34 thoughts on “TILT Holdings TLLTF Stock Forecast & Analysis

    1. Although tilt Holdings generally is known for the C- cell technology Jupiter https://www.jupiterresearch.com/ there are four other companies who also have the right to distribute. I am not sure of the logistics but , but they certainly are the market leaders in the US.

      CEO Gary Santo mentioned in the podcast that they have their own Laboratory and they believe they have come up with some of their own products there for not making them beholden to the current manufacturer or technology.

      This separates tilt from competitors like Green Lane.

      Tilt is a solid company and have shaped a unique vision , Listen to the podcast.

      https://open.spotify.com/episode/2Z1zMk2o7KqtiBWS1IniUr

  1. TILT Holdings (US OTCQX: TLLTF: $0.16) Macro Headwinds Drive 2022 Underperformance; Brand Strategy Bears Early Fruit

    August 16, 2022: TILT reported Q2/22 results inclusive of $47.1M in revenues and $1.1M adjusted EBITDA. Results came in well-below our estimates ($60M/$4.7M) as operations were hindered by wholesale pricing pressure in Massachusetts and Pennsylvania and lower sales volumes for Jupiter’s premium vape hardware. Management announced a plan to mitigate the Jupiter pricing challenge by implementing a good/better/best service however we expect these headwinds to persist for the remainder of the year as that strategy as well as enhanced scale with the 3rd party branded products offering comes online. Weakness was reflected in a guidance cut provided for full year 2022. TILT management now expects 2022 revenues to be between $205M and $210M with adjusted EBITDA in the range of $10M to $15M. The updates compare to prior guidance of between $255M and $265M in revenues and adjusted EBITDA of $27M to $32M. While the underperformance for the quarter and persistent market headwinds are disappointing, TILT is experiencing solid early returns with its house of brands strategy on the plant touching side of the business with cannabis sales up >20% Y/Y and pricing holding steady for third party branded products in the wholesale channel despite pressure elsewhere in the business. The branded products strategy, through which TILT is bringing large independent west coast brands into Massachusetts and Pennsylvania, remains in the early stages however the initial success can be a precursor to even better results moving forward on enhanced scale of operations and deeper relationships with partner brands We adjust our estimates to reflect results and the guidance cut however our rating and price target remain Buy and $0.50 respectively. Importantly, we note that unlike in prior years, TILT is positioned to weather further challenging market conditions following the sale lease back transactions announced this past winter and execution by management. Meanwhile on the plant touching side of the business, TILT has a major catalyst looming with its New York managed services business (operating on behalf of the Shinnecock tribe) particularly if the roll-out of traditional rec sales in the state get delayed into the latter part of 2023 or even later. TILT as a service provider to a Native Tribe will face no such regulatory delays with the company having recently broken ground on a Long Island dispensary.

     

    Investment Highlights:

    Q2 Results Hindered by Less Demand for Higher Margin Jupiter Hardware products.
    2022 Guidance Cut on Macro Headwinds Including Jupiter Weakness and Challenged Wholesale Pricing.
    Company Seeing Early Returns with Brand Push. Greater Benefits to Come from House Brands Strategy on Greater Scale and Enhanced Relationships.
    Capitalized to Pay Off Debt and Weather Challenging Macro following Previous Sale Lease Back.
    NY Remains a Unique Growth Opportunity in 2023.

  2. Tilt Holding Price target c .60$ or aprox  .50$ US 

    Delivers growth in challenging market

    TILT reported Q2 results that were below CG estimates and consensus, although management noted revenue growth outstripped broader growth in its core operating markets on a YoY and QoQ basis. The company’s brand strategy helped shore up pricing as branded prices were largely flat in a quarter that saw weak bulk wholesale pricing. While hardware orders were softer in Q2 than what is typically seasonal as MSOs worked off inventory, TILT has adjusted its offering and pricing strategy to address 2H dynamics, and we expect modest revenue and margin improvement for the balance of the year. We are lowering our estimates and trimming our price target from C$0.75 to C$0.60 to reflect lingering caution on demand and pricing for the sector. We are also introducing 2023 estimates.

    Estimate revision
    • Revenue: 3Q22E from $75.1M to $54M; 2022E from $260M to $206M; 2023E
    $242.1M.
     EBITDA: 3Q22E from $9.7M to $2.6M; FY22E from $29.5M to $11M; 2023E $18M.

    • Our C$0.60 price target represents an EV/sales of 1.3x on 
    Reports revenue and EBITDA miss
    TILT reported Q2 2022 revenue of $47.1 million, a decrease of 3% YoY, and $1.1 million in adjusted EBITDA. Both revenue and adjusted EBITDA came in below our expectations of $52.5 million and $6.7 million, respectively. Revenue decline was primarily driven by lower sales volume and pricing pressures for certain products in TILT’s inhalation business, partially offset by double-digit growth in cannabis operations. Inhalation business generated $35.1 million in revenue in the quarter compared to $38.8 million in the year ago period. The Plant-touching business generated $12.2 million in revenue compared to $10 million in Q2 of 2021. Gross profit came in at $10.9 million or 23% margin, compared to $12.9 million or 27% margin in Q2 2021. The decrease in gross margin was primarily attributable to pricing of certain product lines in TILT’s hardware business, product mix at Massachusetts facility as the company transitions to new genetics, and lower wholesale prices. As of June 30, 2022, TILT had $34.7 million of cash on hand, compared to $7 million December 31, 2021. The Q2 cash balance included restricted cash of $28.2 million, compared to restricted cash of $2.7 million at December 31, 2021. Finally, during the quarter TILT completed a sale leaseback for its Massachusetts facility and signed a $55 million purchase and sale agreement for its Pennsylvania facility (anticipated to close on September 30, 2022).
    Lowers 2022 guidance
    Due to ongoing macroeconomic challenges and lower cannabis wholesale pricing in Massachusetts and Pennsylvania, the company is revising its full year 2022 outlook. Revenue is now anticipated to range between $205-$210 million, down from the previous range of $255-$265 million (CGe $206 million), while Adjusted EBITDA is projected to range between $10-$15 million, down from the previous range of $27-$32 million (CGe $11 million).
  3. Thank you for posting this.
    I have thought the President could basically decriminalize marijuana via his executive authority, and he promised to do decriminalize marijuana, and I still do. I have posted that on this forum.
    I still think POTUS may still take executive action and decriminalize marijuana, if:
    1 If more Democrat lawmakers ask him too.
    2. If POTUS’s advisors, advise POTUS to decriminalize Marijuana via executive action, and hand it to him to sign!
    I also think the Democrats think Marijuana decriminalization is their issue, and they are happy to let Republican prohibitionists continue to stick their heads out and expose their pure hatred for the marijuana plant and see it for what it really is. “Hatred”, which is a one of the Seven deadly Sins. 
     

    1. Yes. What the president can do is add and subtract from Schedule I. I think he can even move things to Schedule II. It is one of the powers vested in the executive. Basically, if he were to remove it from Schedule I then it would be a free-for-all. I think what they will end up doing is trying to pass legislation that allows for the states to handle things in each individual respective manner.

  4. TILT Wins Benzinga Cannabis Award for Best Cannabis Partnership
    TILT Holdings Inc. (“TILT” or the “Company”) (NEO: TILT) (OTCQX: TLLTF), a global provider of cannabis business solutions that include inhalation technologies, cultivation, manufacturing, processing, brand development and retail, today announced that TILT won “Best Cannabis Partnership” at the annual Benzinga Cannabis Capital Conference held in Chicago this week. The industry accolade spotlights TILT’s partnership with the Shinnecock Nation to develop cannabis operations on sovereign land.

    “TILT is a partner-centric company at its core. In early 2019, we pivoted our strategy to essentially build our business around true partnerships starting with cannabis brand deals to bring popular brands to our markets. As the industry turned its focus to brand partnerships, we were already finding immediate successes and went even deeper when thinking about how to enter new markets which brought us to the Shinnecock Nation. We approach partnerships – whether partnering with the Shinnecock Nation and Little Beach Harvest in New York or with our brand partners across Massachusetts, Pennsylvania, and Ohio – with a lens of intentionality and impact, and we actively seek out opportunities that create growth and expansion in our evolving industry,” said Gary Santo, TILT chief executive officer. “We are proud that the industry recognizes our collaboration with the Shinnecock Nation as a prime example of that partnership value. From the beginning, our work with the Shinnecock redefined business models, as well as working relationships, to build sustainable growth through cannabis. Thank you to Benzinga for recognizing our efforts.”
    The Benzinga Cannabis Awards celebrate new, creative, innovative, and outstanding people, solutions, and companies in the cannabis industry.
    TILT and Shinnecock broke ground on the dispensary, Little Beach Harvest, in July 2022, and are planning a Q1 2023 opening. Plans for Little Beach Harvest include a 5,000 square-feet of dispensary space and a drive-through service along the main Southampton roadway, connecting the tribe with the Hamptons community. For more information on TILT, visit http://www.tiltholdings.com .

  5. The debt that Tilt has was bothering many potential  investors,,, This is a good StartTILT Extends Maturity Date for Certain Senior Debt Holders, Signs Fourth Amendment for its White Haven, Pennsylvania, Facility Purchase and Sale AgreementPHOENIX, Oct. 25, 2022 (GLOBE NEWSWIRE) — TILT Holdings Inc. (“TILT” or the “Company”) (NEO:TILT) (OTCQX: TLLTF), a global provider of cannabis business solutions that include inhalation technologies, cultivation, manufacturing, processing, brand development and retail, has signed a fourth amendment (the “Amendment”) to its previously announced definitive agreement with Innovative Industrial Properties, Inc. (“IIPR”) to sell and leaseback its White Haven, Pennsylvania facility. The Amendment allows TILT and IIPR to extend the end of the investigational period of the transaction contemplated to a date that is on or before December 31, 2022. The previous extension of the investigational period was to accommodate the second round of testing to satisfy requests from the Pennsylvania Department of Environmental Protection, which has been satisfactorily completed. The parties believe that this extension should provide sufficient time to address the final steps of regulatory concerns.The Company also has entered into amendments to the senior secured promissory notes held by certain senior debt noteholders totaling US $9.6 million to extend the maturity date from November 1, 2022, to November 14, 2022, in exchange for an increase in the interest rate to prime plus 8.5%.“We continue to make progress towards the refinancing of our legacy debt and today’s announcements are another step towards solidifying our capital structure to support the long-term growth of TILT,” said Gary Santo, chief executive officer of TILT. “With the cash remaining in escrow, as well as cash-on-hand, we expect to pay off the senior notes maturing on November 1 later this week. We are excited that a number of existing senior noteholders have agreed to extend the maturity date on their notes in order to explore the potential for being a part of a new financing comprised of new and existing noteholders that, together with the proceeds from the anticipated closing of the sale leaseback of our Pennsylvania facility, we expect will allow us to not only address the remaining November 2022 maturities, but also our April 2023 ones as well.”Santo added, “We appreciate the business partnership we have built with IIPR and with the environmental testing results now final, we believe that the extension granted by the Amendment will allow us to resolve our long-term debt structure as part of a simultaneous closing anticipated to occur before year end.”

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