Down 99% from ATH, is Tilray Brands (TLRY) stock a bargain?

December 14, 2023 12:32 AM AEDT | By Invezz

Down 99% from ATH, is Tilray Brands (TLRY) stock a bargain? — Image source: Invezz

Tilray’s business is more broad now

Tilray Brands is one of the biggest companies in the cannabis industry. Over the years, its market cap has retreated from a peak of over $19 billion to $1.3 billion today. This stock depreciation has happened even after the company’s total revenue jumped from over $179.3 million in May 2019 to over $650 million in the TTM.

Tilray Brands has grown organically and through acquisitions. Some of the most notable acquisitions were Natura Natural Holdings, Manitoba Harvest, MedMen, and Hexo. It also merged with Aphria in 2021 and recently, it acquired several beer brands from AB InBev.

Tilray has spent over $1 billion through acquisitions. These buyouts have helped to create a diversified company in industries like medical cannabis, adult cannabis, hemp-based foods, and alcoholic beverages.

The challenge for Tilray is that these acquisitions have resulted in a cash incinerator that has accumulated substantial losses. According to SeekingAlpha, its total loss has jumped from $25 million in 2019 to over $1.45 billion in the past twelve months.

As a result, Tilray has also diluted its shareholders by issuing new shares. In November, its shareholders voted to authorize increasing outstanding shares from 990 million to 1.2 billion. This is notable since the company had 76.4 million shares in 2018.

While investors have been burnt, management has been adequately compensated. For example, the CEO, Irwin Simon, earned $15 million in 2023. In comparison, Jamie Dimon, the CEO of JP Morgan, made $34.5 million in 2023 even though the company made billions in profits.

The outlook for Tilray Brands is quite uncertain now that the cannabis industry is slowing and regulatory challenges remain. This is notable since its cannabis segment represents over 40% of its total revenue. The hope is that the alcoholic beverage will continue growing as the management expects. The hope is that the segment will generate over $300 million this year.

Tilray Brands stock price forecast

The daily chart shows that the TLRY stock price has been under pressure in the past few months. It has remained below the 50-day and 100-day Exponential Moving Averages. The stock has formed a bearish flag pattern, one of the most worrying signs. Further, the Relative Strength Index (RSI) has moved from the key point at 65 to below 50. The MACD has also drifted downwards. Therefore, the outlook for the stock is bearish, with the next point to watch being at $1.62, the lowest point on November 10th. This price is about 10% below the current point and is in line with my last forecast.

The post Down 99% from ATH, is Tilray Brands (TLRY) stock a bargain? appeared first on Invezz

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.