As Tilray Expands Its Medical Cannabis Business, Should You Buy, Sell, or Hold TLRY Stock?

Core Insights - Tilray's fiscal year 2025 earnings show a net revenue of $821 million, a 4% increase from the previous year, with adjustments for constant currency bringing it to $834 million [1][5] - The company is valued at a market capitalization of approximately $1.78 billion, with valuation metrics indicating it trades at a discount compared to sector medians [2] - Tilray is expanding its product offerings in Germany, launching five new cannabis products, which is seen as a strategic move to enhance its market presence [9][10] Financial Performance - The net revenue for fiscal year 2025 was $821 million, up 4% from $789 million the prior year, with a gross margin increase in the cannabis segment from 33% to 40% [1][5] - Despite a reported net loss of $2.18 billion, largely due to a non-cash impairment of goodwill, adjusted net income rose 45% to $9 million [6] - The company holds a strong liquidity position with $256 million in cash and marketable securities, having reduced its long-term debt significantly [7] Market Position and Valuation - Tilray's price-to-sales (P/S) ratio is 2.17x, compared to the sector median of 4.18x, indicating a lower valuation relative to peers [2] - The stock price is currently at $1.64, with a year-to-date increase of 21.8%, although it has seen a 52-week decline of 1.8% [3] Strategic Initiatives - The company is focusing on expanding its premium craft cannabis portfolio in Germany, which is crucial for establishing a foothold in the European market [9][10] - Recent endorsements of medical cannabis by public figures have contributed to a more optimistic outlook for the sector, potentially benefiting companies like Tilray [8] Future Outlook - Analysts estimate adjusted earnings per share for the upcoming quarters to be negative, reflecting caution regarding future profitability [11] - Management guidance indicates optimism for fiscal 2026, with expected adjusted EBITDA growth of 13% to 31% compared to fiscal 2025 [12] - The consensus among analysts is moderately bullish, with a "Moderate Buy" rating and an average price target of $1.21, suggesting a downside potential of approximately 26% [13]