Is Tilray Brands a Dirt Cheap Growth Stock or Just a Bad Buy?

Core Viewpoint - Tilray Brands, a leading cannabis company in North America, has seen its stock value decline significantly, losing 90% since 2022, despite recent rallies in its shares [1][2] Group 1: Business Overview - Tilray Brands has a valuation exceeding $600 million, but its stock has plummeted in recent years [1] - The company has diversified its operations, with its core cannabis business now accounting for only 30% of total revenue, while beverage and distribution businesses contribute 29% and 33% respectively [5][6] - For the fiscal year ending May 31, Tilray reported a 4% increase in revenue, reaching $821.3 million [6] Group 2: Growth Potential - The company is projecting adjusted EBITDA for the current fiscal year (ending May 31, 2026) to be between $62 million and $72 million, representing a growth of 13% to 31% from the previous year [7] - Tilray's strategy includes acquiring craft beer brands to expand its revenue streams, which has allowed it to grow despite the lack of U.S. cannabis legalization [4][8] Group 3: Challenges and Risks - Despite growth, Tilray has heavily relied on acquisitions, with its beverage segment experiencing a 14% decline in revenue year-over-year [8] - The company has not met its ambitious revenue targets, finishing the last fiscal year with less than $1 billion in annual revenue, despite earlier projections of reaching $4 billion by 2024 [9][10] - Tilray reported a net loss of nearly $1.3 billion last quarter, with significant impairment charges, indicating challenges in achieving profitability [11] Group 4: Investment Considerations - The stock trades below its book value, with a price-to-book ratio of about 0.4, which may attract long-term investors [7] - However, the overall trend for Tilray's stock has been declining, and without compelling growth opportunities beyond acquisitions, it may be prudent for investors to approach with caution [12][13]