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TLRY Stock Loses 17% in Three Months: Should You Buy, Hold or Sell?
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Key Takeaways
Tilray's fiscal 2026 revenues rose 11% to a record $915.5 million, led by all four segments.
Tilray's adjusted EBITDA increased 11% to $61.1 million, but adjusted free cash flow remained negative.
TLRY faces margin and competitive pressures as consensus fiscal 2028 EPS has shifted to an expected loss.
Shares of Tilray Brands (TLRY - Free Report) have been declining steadily over the past three months, despite continued improvement in the company’s topline growth. The weakness could be attributed to investors' concerns around Tilray’s ability to translate its expanding revenue base into sustainable profitability and stronger cash generation.
Let’s delve into the company’s fundamentals to assess whether the recent decline presents a buying opportunity or whether investors should remain on the sidelines.
TLRY’s Multi-Segment Model Continues to Drive Growth
Tilray’s diversified business model continued to support top-line growth in fiscal 2026 (year ended May 2026), with revenue increasing 11% year over year to a record $915.5 million. Growth was broad-based, with all four operating segments contributing to the increase. Distribution remained the company’s largest business by revenue, followed by cannabis, beverage and wellness.
The cannabis business delivered a mixed performance, even though sales rose 8% to $268.3 million. Canadian adult-use sales continued to grow, supported by strong demand for pre-rolls, edibles and vapes, but medical cannabis sales in the country declined amid changes to Veterans Affairs reimbursement. Internationally, however, the picture was considerably stronger, with medical cannabis revenues increasing 34% to $84.9 million, led by Germany, the U.K., Poland and Italy. Tilray is expanding its production and distribution infrastructure across Europe to capitalize on this demand, although price compression remains a challenge.
Distribution, largely driven by CC Pharma, was another bright spot, with revenues increasing 21% to $327.2 million. The business provides Tilray with a sizable pharmaceutical distribution network in Germany and increasingly serves as an important complement to its medical cannabis operations.
Meanwhile, the beverage business rose 6% to $254 million, helped by the acquisition of BrewDog, which contributed $51.1 million in Q4 alone and gave Tilray a much broader international platform. The upcoming Carlsberg partnership should further broaden Tilray’s U.S. beverage portfolio and add growth opportunities. The wellness segment remained a smaller but growing business, with revenues up 9% to $65.9 million.
Going into fiscal 2027, Tilray expects its enlarged platform to support an approximately $1.2 billion annualized revenue run rate. The company is also positioning its medical cannabis infrastructure to capitalize on the evolving U.S. regulatory environment, although this remains a longer-term opportunity rather than a major contributor to the current outlook.
Margins & Cash Generation Remain Key Concerns for TLRY
Despite stronger sales, Tilray still needs to do more to translate growth into sustainable profitability. Adjusted gross margin remained flat at 29% in fiscal 2026, although adjusted net income improved and adjusted EBITDA increased 11% to a record $61.1 million. Management expects further improvement in fiscal 2027, guiding to adjusted EBITDA of $68-$75 million.
However, margin expansion will depend on improving the economics of the legacy beer business and extracting greater value from CC Pharma. Management sees potential to expand CC Pharma’s gross margin by another 5-7 percentage points and believes 15-18% EBITDA margins are achievable for the branded-products platform over the next several years. However, this remains a long-term aspiration rather than near-term guidance.
Cash generation remains another concern. Although both operating cash flow and adjusted free cash flow improved year over year, they remained negative. The results were also affected by Tilray’s investment of roughly $50 million in BrewDog working capital.
The balance sheet has nevertheless strengthened considerably, with net debt below $1 million. But Tilray also raised $87 million through its ATM program, which improves liquidity but dilutes existing shareholders. With acquisitions remaining an important part of the strategy, future returns will depend on how effectively the company integrates these assets and converts them into stronger earnings and cash flow.
Rising Competition
Tilray operates in an increasingly competitive cannabis market, with established players such as Canopy Growth (CGC - Free Report) and Aurora Cannabis (ACB - Free Report) pursuing growth across Canada and international medical cannabis markets. Both companies are also working to improve profitability while expanding their international presence, increasing competitive pressure on Tilray.
Aurora, in particular, has been emphasizing higher-margin international medical cannabis markets, especially Europe. The company’s international platform has also attracted strategic interest from Curaleaf Holdings (CURLF - Free Report) , which recently launched an unsolicited bid for Aurora, highlighting the growing strategic value of international medical cannabis assets.
Canopy Growth, meanwhile, is showing signs of an operational recovery, with cannabis revenue growth and improving margins. It expects to achieve positive adjusted EBITDA in fiscal 2027 as MTL Cannabis integration and cost improvements take hold.
TLRY Stock Performance & Valuation
Shares of Tilray have plummeted 54% on a year-to-date basis compared to the industry’s 23% decline.
Image Source: Zacks Investment Research
Consensus estimates for TLRY’s bottom-line per share for fiscal 2027 and 2028 have moved lower over the past 60 days.
Image Source: Zacks Investment Research
How to Play TLRY Stock?
Tilray, which currently carries a Zacks Rank #3 (Hold), has made meaningful progress in revenue growth, adjusted EBITDA and debt reduction. However, investors have yet to gain confidence that the company can consistently convert its scale into stronger profitability and cash flow. Management has outlined several opportunities to improve margins, including cost savings in the beverage business and higher-value services within CC Pharma. However, investors are likely to wait for clearer evidence that these initiatives are translating into sustainable earnings and cash-flow improvements.
The cautious analyst outlook further supports a wait-and-watch approach. Consensus estimates for TLRY’s earnings per share have weakened over the past 60 days, with the fiscal 2028 estimate shifting from an expected 10-cent profit to an 18-cent loss. Given the continuing margin, cash-flow and competitive concerns, investors may want to remain on the sidelines until Tilray demonstrates more consistent earnings growth and cash generation.
View the Zacks #1 Rank List
Image: Bigstock
TLRY Stock Loses 17% in Three Months: Should You Buy, Hold or Sell?
Key Takeaways
Shares of Tilray Brands (TLRY - Free Report) have been declining steadily over the past three months, despite continued improvement in the company’s topline growth. The weakness could be attributed to investors' concerns around Tilray’s ability to translate its expanding revenue base into sustainable profitability and stronger cash generation.
Let’s delve into the company’s fundamentals to assess whether the recent decline presents a buying opportunity or whether investors should remain on the sidelines.
TLRY’s Multi-Segment Model Continues to Drive Growth
Tilray’s diversified business model continued to support top-line growth in fiscal 2026 (year ended May 2026), with revenue increasing 11% year over year to a record $915.5 million. Growth was broad-based, with all four operating segments contributing to the increase. Distribution remained the company’s largest business by revenue, followed by cannabis, beverage and wellness.
The cannabis business delivered a mixed performance, even though sales rose 8% to $268.3 million. Canadian adult-use sales continued to grow, supported by strong demand for pre-rolls, edibles and vapes, but medical cannabis sales in the country declined amid changes to Veterans Affairs reimbursement. Internationally, however, the picture was considerably stronger, with medical cannabis revenues increasing 34% to $84.9 million, led by Germany, the U.K., Poland and Italy. Tilray is expanding its production and distribution infrastructure across Europe to capitalize on this demand, although price compression remains a challenge.
Distribution, largely driven by CC Pharma, was another bright spot, with revenues increasing 21% to $327.2 million. The business provides Tilray with a sizable pharmaceutical distribution network in Germany and increasingly serves as an important complement to its medical cannabis operations.
Meanwhile, the beverage business rose 6% to $254 million, helped by the acquisition of BrewDog, which contributed $51.1 million in Q4 alone and gave Tilray a much broader international platform. The upcoming Carlsberg partnership should further broaden Tilray’s U.S. beverage portfolio and add growth opportunities. The wellness segment remained a smaller but growing business, with revenues up 9% to $65.9 million.
Going into fiscal 2027, Tilray expects its enlarged platform to support an approximately $1.2 billion annualized revenue run rate. The company is also positioning its medical cannabis infrastructure to capitalize on the evolving U.S. regulatory environment, although this remains a longer-term opportunity rather than a major contributor to the current outlook.
Margins & Cash Generation Remain Key Concerns for TLRY
Despite stronger sales, Tilray still needs to do more to translate growth into sustainable profitability. Adjusted gross margin remained flat at 29% in fiscal 2026, although adjusted net income improved and adjusted EBITDA increased 11% to a record $61.1 million. Management expects further improvement in fiscal 2027, guiding to adjusted EBITDA of $68-$75 million.
However, margin expansion will depend on improving the economics of the legacy beer business and extracting greater value from CC Pharma. Management sees potential to expand CC Pharma’s gross margin by another 5-7 percentage points and believes 15-18% EBITDA margins are achievable for the branded-products platform over the next several years. However, this remains a long-term aspiration rather than near-term guidance.
Cash generation remains another concern. Although both operating cash flow and adjusted free cash flow improved year over year, they remained negative. The results were also affected by Tilray’s investment of roughly $50 million in BrewDog working capital.
The balance sheet has nevertheless strengthened considerably, with net debt below $1 million. But Tilray also raised $87 million through its ATM program, which improves liquidity but dilutes existing shareholders. With acquisitions remaining an important part of the strategy, future returns will depend on how effectively the company integrates these assets and converts them into stronger earnings and cash flow.
Rising Competition
Tilray operates in an increasingly competitive cannabis market, with established players such as Canopy Growth (CGC - Free Report) and Aurora Cannabis (ACB - Free Report) pursuing growth across Canada and international medical cannabis markets. Both companies are also working to improve profitability while expanding their international presence, increasing competitive pressure on Tilray.
Aurora, in particular, has been emphasizing higher-margin international medical cannabis markets, especially Europe. The company’s international platform has also attracted strategic interest from Curaleaf Holdings (CURLF - Free Report) , which recently launched an unsolicited bid for Aurora, highlighting the growing strategic value of international medical cannabis assets.
Canopy Growth, meanwhile, is showing signs of an operational recovery, with cannabis revenue growth and improving margins. It expects to achieve positive adjusted EBITDA in fiscal 2027 as MTL Cannabis integration and cost improvements take hold.
TLRY Stock Performance & Valuation
Shares of Tilray have plummeted 54% on a year-to-date basis compared to the industry’s 23% decline.
Image Source: Zacks Investment Research
Consensus estimates for TLRY’s bottom-line per share for fiscal 2027 and 2028 have moved lower over the past 60 days.
Image Source: Zacks Investment Research
How to Play TLRY Stock?
Tilray, which currently carries a Zacks Rank #3 (Hold), has made meaningful progress in revenue growth, adjusted EBITDA and debt reduction. However, investors have yet to gain confidence that the company can consistently convert its scale into stronger profitability and cash flow. Management has outlined several opportunities to improve margins, including cost savings in the beverage business and higher-value services within CC Pharma. However, investors are likely to wait for clearer evidence that these initiatives are translating into sustainable earnings and cash-flow improvements.
The cautious analyst outlook further supports a wait-and-watch approach. Consensus estimates for TLRY’s earnings per share have weakened over the past 60 days, with the fiscal 2028 estimate shifting from an expected 10-cent profit to an 18-cent loss. Given the continuing margin, cash-flow and competitive concerns, investors may want to remain on the sidelines until Tilray demonstrates more consistent earnings growth and cash generation.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.