To The Moon

$Tilray Inc.(TLRY)$ reported substantial revenue growth for fiscal year 2024, reaching $789 million—a 26% increase year-over-year. Key segments driving this growth included Canadian and international cannabis, wellness, and beverage alcohol. The company’s Canadian cannabis revenue hit $58.8 million in Q4, marking a strong close to the year. Beverage alcohol, in particular, saw significant expansion, with Q4 revenue rising 137% year-over-year, contributing to a total annualized projection of $300 million for this segment. Tilray’s focus on strategic acquisitions, like HEXO Corp., and expanding its craft beverage portfolio has strengthened its position in the market.

Fall 99% Since 2018

$Tilray Inc.(TLRY)$ has faced increasingly difficult challenges, and its outlook has shifted from hopeful to concerning. Despite the company's attempts to diversify by expanding into the U.S. craft beer market and positioning for potential cannabis legalization, its core cannabis operations remain under intense pressure. With the U.S. federal legalization stalled, competition in Canada, and ongoing financial struggles, Tilray's growth prospects look weak. Analysts suggest Tilray’s stock may not recover soon, and caution is advised for investors looking to enter or hold positions in this volatile sector.

Earnings & Revenue

For the third quarter of fiscal 2024, Tilray achieved $188.3 million in revenue, up 30% from the previous year. Gross profit stood at $49.4 million, with adjusted gross profit at $51.6 million. However, despite revenue growth, Tilray continued to report net losses, though they have narrowed significantly compared to previous quarters, with a Q3 net loss of $105 million (down from $1.2 billion in the prior year)​

Growth Analysis

Tilray's growth potential is notable, but its path to profitability remains uncertain, making it a volatile option for investors. Investors should be cautious and closely monitor financial health indicators and management’s cost control strategies if considering Tilray as a long-term investment.

Fundamental Analysis

Analysts consistently revise revenue estimates upward, yet the company's profitability margins remain thin due to high operational costs and debt. Tilray has undertaken acquisitions to expand its market share and product range, which has added to revenue growth but also strained financial stability.

Currently, Tilray is valued below many analysts' target prices, suggesting potential for appreciation if profitability improves. However, profitability metrics, such as return on assets and EBITDA margins, have been underwhelming. Some analysts consider TLRY stock high-risk, given ongoing cash flow issues and downward revisions in profit estimates over the past year.

Technical Analysis

Resistance and Support: The stock has shown significant support levels recently at around $1.87, with resistance in the $1.95 range. Breaking above these could provide upward momentum, but any reversal below support could pressure the stock further.

Volatility Concerns: Technical analysts are also watching Tilray’s volatility, indicated by the Average True Range (ATR), which remains moderate. The potential for volatility means short-term trading opportunities are possible, though they carry inherent risk.

The Risk of Meme Stock

$Tilray Inc.(TLRY)$ has gained popularity as a "meme stock," fueled by retail investors and social media-driven trading rather than fundamentals. Like other meme stocks, Tilray has experienced large price swings and speculative interest, especially among investors on platforms like Reddit. Despite its early promise as a leader in the cannabis sector, Tilray's volatile stock performance has been driven more by investor enthusiasm and market hype than by consistent revenue or profitability. Meme-stock interest can create short-term gains, but it also makes TLRY a high-risk investment.

Conclusion

Tilray's future isn’t entirely dependent on the U.S. market, as the company has achieved some traction in Germany and other international markets. However, the U.S. remains the most profitable opportunity, and recent developments suggest Tilray’s prospects there are less promising than anticipated. This places Tilray in a potentially weaker position than before the election, worsening its already challenging situation.

Given these obstacles, Tilray’s financial performance is unlikely to show significant improvement in the near future, and its stock may follow a similar trend. For now, Tilray doesn’t appear to be an appealing investment option, and potential investors might consider keeping their distance.

The stock is in chaos right now for risk-averse investors due to ongoing challenges, including inconsistent financial performance, slow progress toward profitability, and the stalled U.S. federal legalization of cannabis. Although Tilray is working to diversify, especially in the U.S. beverage market, the stock remains volatile and heavily influenced by meme stock dynamics, making it suitable primarily for speculative traders who can handle high risk. For long-term investors, there may be safer options in more stable sectors.