Tilray (TLRY) AI Stock Analysis

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Tilray

(NASDAQ:TLRY)

44Neutral

Tilray's overall stock score reflects significant financial and operational challenges. The company struggles with profitability, evident in its negative P/E ratio and substantial losses. Technical indicators also point to a bearish trend, with the stock trading below key moving averages. While there are positive signs in the earnings call, such as improved cannabis margins, they are overshadowed by revenue declines and significant net losses. The recent loan refinancing is a positive step but not enough to offset the broader challenges.

Positive Factors

Financial Performance

Adjusted EBITDA exceeded expectations, driven by better-than-expected Canadian cannabis gross margins.

Growth Prospects

Management expects stronger performance in the fourth fiscal quarter due to seasonal growth in acquired brands.

Operational Improvements

Capital investments in a new facility are expected to enhance Canadian adult-use trends by optimizing the use of byproducts for vapes and infused pre-rolls.

Negative Factors

Earnings

Tilray reported third-quarter sales of $186M, falling short of both company and consensus estimates.

Market Challenges

The craft beer category and Canadian cannabis markets are under competitive pressure, affecting Tilray's outlook.

Regulatory Environment

The lack of clarity regarding the path to federal legalization of cannabis in the U.S. impacts future prospects.

Tilray (TLRY) vs. S&P 500 (SPY)

Market Cap

$452.67M

Dividend YieldN/A

Average Volume (3M)24.48M

Price to Earnings (P/E)―

Beta (1Y)1.21

Revenue Growth11.22%

EPS Growth-108.58%

CountryUS

Employees2,650

SectorHealthcare

Sector Strength38

IndustryDrug Manufacturers - Specialty & Generic

Share Statistics

EPS (TTM)-0.87

Shares Outstanding1,025,530,500

10 Day Avg. Volume19,374,588

30 Day Avg. Volume24,476,567

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.14

Price to Sales (P/S)0.00

P/FCF Ratio-5.31

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$0.93

Price Target Upside86.00% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Tilray Business Overview & Revenue Model

Company DescriptionTilray Brands, Inc. engages in the research, cultivation, production, marketing, and distribution of medical cannabis products in Canada, the United States, Europe, Australia, New Zealand, Latin America, and internationally. The company operates through four segments: Cannabis Business, Distribution Business, Beverage Alcohol Business, and Wellness Business. It offers medical and adult-use cannabis products, including GMP-certified flowers, oils, vapes, edibles, and topicals; purchases and resells pharmaceutical and wellness products; and produces, markets, sells, and distributes beverage alcohol products, and hemp-based food and other wellness products. The company offers its products under the Tilray, Aphria, Broken Coast, Symbios, B!NGO, The Batch, P'tite Pof, Dubon, Good Supply, Solei, Chowie Wowie, Canaca, RIFF, SweetWater, Breckenridge Distillery, Alpine Beer Company, and Green Flash brands. It sells its products to retailers, wholesalers, patients, physicians, hospitals, pharmacies, researchers, and governments, as well as direct to consumers. The company was formerly known as Tilray, Inc. Tilray Brands, Inc. is headquartered in Leamington, Canada.

How the Company Makes MoneyTilray generates revenue primarily through the sale of cannabis and cannabis-derived products to medical patients and adult-use consumers. Key revenue streams include medical cannabis sales, recreational cannabis sales, and the sale of hemp-based foods and alcoholic beverages. The company leverages its extensive distribution network and strategic partnerships to penetrate various markets, such as through its acquisition of Manitoba Harvest, a leading hemp foods producer, and SweetWater Brewing Company, an American craft brewery. These acquisitions have expanded Tilray's portfolio and provided new revenue opportunities beyond traditional cannabis products. Additionally, the company's investments in research and development, as well as its ability to secure supply agreements with governments and private entities, contribute significantly to its potential earnings growth.

Tilray Financial Statement Overview

Summary

Tilray faces significant financial challenges. Despite modest revenue growth, its profitability is under pressure with persistent losses. The balance sheet reflects low leverage, yet declining equity and negative returns indicate ongoing difficulties. Cash flow issues further emphasize the need for operational improvements.

Income Statement

Neutral

Tilray's income statement shows significant challenges, with a negative net profit margin at -114.9% TTM, indicating high losses relative to revenue. Despite a slight revenue growth of 4.79% from the previous year, the company struggles with profitability as evidenced by negative EBIT and EBITDA margins. The gross profit margin is at 28.57% TTM, indicating some efficiency in production but insufficient to cover operating costs.

Balance Sheet

Neutral

The balance sheet reveals a debt-to-equity ratio of 0.08, suggesting relatively low leverage, which is a positive sign. However, this is offset by a concerning drop in stockholders' equity over time. The equity ratio is 80.22% TTM, highlighting a strong equity position relative to assets. Nevertheless, the negative return on equity of -34.78% TTM reflects ongoing profitability issues.

Cash Flow

Negative

Cash flow analysis shows negative free cash flow growth, indicating cash outflows continue to exceed inflows. The operating cash flow to net income ratio is -0.05 TTM, suggesting operational inefficiencies. The company also exhibits a negative free cash flow to net income ratio, pointing to difficulties in generating cash relative to reported losses.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
826.66M	788.94M	627.12M	628.37M	513.09M	391.00M
	Gross Profit
236.24M	223.35M	146.96M	116.82M	123.18M	137.68M
	EBIT
-725.55M	-174.75M	-1.37B	153.29M	-4.95M	51.48M
	EBITDA
-648.68M	-72.84M	-889.52M	-246.40M	-218.36M	-18.40M
	Net Income Common Stockholders
-945.62M	-244.98M	-1.44B	-434.13M	-336.01M	―
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
225.86M	260.52M	448.53M	415.91M	488.47M	358.47M
	Total Assets
4.21B	4.22B	4.31B	5.45B	6.03B	1.80B
	Total Debt
481.62M	387.32M	590.13M	623.81M	938.66M	300.32M
	Net Debt
335.37M	158.98M	383.50M	207.90M	450.19M	-58.15M
	Total Liabilities
869.82M	778.49M	977.32M	1.01B	1.56B	475.89M
	Stockholders Equity
3.36B	3.44B	3.32B	4.40B	4.46B	1.31B
Cash Flow		Free Cash Flow
-81.23M	-60.15M	-12.89M	-211.33M	-83.59M	―
	Operating Cash Flow
-50.67M	-30.91M	7.91M	-177.26M	-44.72M	―
	Investing Cash Flow
-16.47M	128.35M	-285.11M	-21.53M	46.10M	―
	Financing Cash Flow
124.77M	-75.19M	70.16M	128.20M	124.31M	125.40M

Tilray Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price0.50

Price Trends

50DMA

0.54

Negative

100DMA

0.81

Negative

200DMA

1.21

Negative

Market Momentum

MACD

-0.03

Negative

RSI

52.32

Neutral

STOCH

62.99

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TLRY, the sentiment is Neutral. The current price of 0.5 is above the 20-day moving average (MA) of 0.46, below the 50-day MA of 0.54, and below the 200-day MA of 1.21, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 52.32 is Neutral, neither overbought nor oversold. The STOCH value of 62.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TLRY.

Tilray Risk Analysis

Tilray disclosed 59 risk factors in its most recent earnings report. Tilray reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Tilray Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	52 Neutral	$5.04B	3.15	-44.58%	2.85%	16.08%	-0.27%
SNDL	52 Neutral	$329.34M	―	-9.20%	―	-3.02%	26.00%
TLRY	44 Neutral	$452.67M	―	-31.06%	―	11.22%	-108.58%
FLGC	43 Neutral	$15.68M	―	-336.65%	―	-28.78%	86.97%
CPHI	37 Underperform	$7.24M	―	-59.14%	―	-33.10%	71.37%
YCBD	28 Underperform	$8.46M	―	-8.46%	―	-18.02%	78.28%

* Healthcare Sector Average

Performance Comparison

TLRY

Tilray

0.50

-1.48

-74.75%

CPHI

China Pharma Holdings

2.22

-1.06

-32.32%

YCBD

cbdMD

0.99

-4.73

-82.69%

SNDL

1.35

-1.11

-45.12%

FLGC

Flora Growth

0.68

-0.63

-48.09%

AKAN

Akanda Corp

1.17

-12.64

-91.53%

Tilray Earnings Call Summary

Earnings Call Date:Apr 08, 2025

(Q3-2025)

% Change Since: -13.79%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call presented both positive and negative aspects. While there were notable improvements in cannabis gross margins and international growth, significant challenges remain, particularly with net revenue decline and a substantial net loss due to non-cash impairment. The beverage segment showed mixed results with some areas of growth, but overall sales volumes faced challenges.

Q3-2025 Updates

Positive Updates

Record Cannabis Gross Margin

Tilray achieved its highest cannabis gross margin in almost two years, increasing by eight hundred basis points year over year to reach 41%.

Significant International Growth

Quarter over quarter and year over year revenue growth was seen in several international markets including Germany, Italy, Luxembourg, and Portugal. Medical cannabis sales in Germany grew significantly with flower sales increasing by 79% post-legalization.

Project 420 Cost Savings

Tilray increased its Project 420 cost savings target to $33 million, achieving $20.6 million on an annualized basis.

Beverage Segment Performance

Tilray Beverages generated $55.9 million in net revenue with an increased gross margin to 36% compared to 34% in the prior year quarter.

Strong Balance Sheet

Tilray reduced its net debt position to approximately $50 million, with cash and marketable securities totaling $248 million.

Negative Updates

Net Revenue Decline

Net revenue for the quarter was $185.8 million, down from $188.3 million in the previous year quarter. Adjusted net revenue was impacted by strategic initiatives reducing it by $13 million.

Significant Net Loss

Reported a net loss of $793.5 million for the quarter, compared to a net loss of $105 million in the prior year quarter, primarily due to a $700 million non-cash impairment.

Canadian Cannabis Revenue Impact

Strategic decisions to focus on margin and not revenue temporarily in the vape and infused pre-roll space resulted in a decrease in year-over-year revenue of approximately $4 million.

Challenges in the Beverage Segment

Tracking data indicates that sales and volumes for the craft beer brands are down about mid-teens in the third quarter.

Company Guidance

In its fiscal 2025 Q3 earnings call, Tilray Brands provided guidance highlighting a focus on profitability and operational efficiency across its diversified product lines. The company reported a net revenue of $186 million, or $193 million on a constant currency basis, with strategic decisions impacting revenue by about $13 million. Adjusted net revenue, accounting for these impacts, increased by 10% to $206 million. Tilray achieved a 5% increase in gross profit, and gross margins expanded by 200 basis points to 28%. The cannabis gross margin reached 41%, the highest in nearly two years, driven by international sales and strategic focus on profitable segments. Tilray's balance sheet remains robust, with cash and marketable securities totaling $248 million and net debt below one times EBITDA. The company revised its fiscal 2025 net revenue guidance to $850-$900 million, with adjustments for strategic initiatives and SKU rationalization.

Tilray Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

Tilray Refinances Loan to Strengthen Financial Stability

Positive

Feb 26, 2025

On February 21, 2025, Aphria Diamond Inc., a subsidiary of Tilray Brands, Inc., refinanced its existing term loan by entering into a new Credit Agreement with the Canadian Imperial Bank of Commerce. This agreement involves term loans totaling CAD $53 million, with a significant portion used to repay a prior credit agreement. The new loans mature in 2028, with quarterly repayments required, and are secured by a first lien on the borrower’s assets. This refinancing effort is part of Tilray’s strategy to manage its financial obligations and improve its capital structure, potentially impacting its financial stability and market operations.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.