In line with other Canadian cannabis stocks, Tilray (TSX:TLRY) has experienced significant volatility in the market. The company went public in July 2018, just before Canada legalized recreational cannabis, and saw its stock price rise from less than US$30 to over US$150 in October 2018. However, currently trading at US$1.72 per share with a market cap of approximately US$1 billion, Tilray, like many others in the industry, is facing challenges such as oversupply, increasing competition, and struggling to achieve consistent profitability.
The recent quarterly results for Tilray in the third quarter of fiscal 2024 showed revenue of US$188.3 million and breakeven adjusted earnings, falling short of analysts’ expectations of a US$0.05 loss per share with revenue of US$198.3 million. Despite a 30% year-over-year increase in sales due to acquisitions, including a significant rise in the beverage-alcohol segment, Tilray also faced a decline in distribution revenue in Q3, impacted by changing rebate regulations and IT issues.
While Tilray’s CEO remains optimistic about the company’s strategic expansion into complementary markets, concerns about profitability persist, especially after a revised EBITDA forecast for fiscal 2024 and ongoing cash burn without positive free cash flow. Analysts predict a potential surge in Tilray’s stock price, but caution is advised due to weak fundamentals and ongoing losses.
