Shares of Tilray were rising about 6% on Thursday.
Tilray was part of a spate of cannabis company earnings releases this week, reporting revenue of $10 million that was slightly below estimates, which sent the stock tumbling following the release. But Cowen analyst Vivien Azer sees a silver lining in Tilray's earnings cloud.
"We have an Outperform rating on TLRY. We believe that access to strong and established U.S. brands, proprietary consumer insights data sets, as well as early success in securing provincial supply agreements position TLRY to capitalize in the industry's robust growth," Azer wrote.
Investors may have expected too much from the legalization of adult use cannabis in Canada on Oct. 17 in this round of earnings releases as the benefits from the opening of that market won't likely be felt until the current quarter.
The firm expects the total addressable market in Canada for cannabis, including medical, to reach $12 billion by 2025. That number doesn't include potential international revenue, which Tilray is already taking advantage of.
"During the quarter, Tilray made exports to Germany, the U.K., Australia and the U.S. as well as completed its first outdoor harvest at its Portugal facility," Azer wrote. "We note that management was exceedingly bullish on the prospects of the U.S. market, citing recent political events and midterm elections."
Still, Cowen is lowering its fiscal 2018 revenue estimates for Tilray to $39.9 million from $41.6 million and also significantly cutting its fiscal 2019 estimate to $119.5 million from $145 million. But it does maintain its longer-term metrics as it sees Tilray's future as still being bright.