Will the Tilray Brands stock price rise or fall after earnings?

The Tilray Brands stock price has crawled back in the past few days, rising from the December low of $1.15 to $1.45. This mini-rebound will be put to test when the cannabis company publishes its financial results later this week. So, will the TLRY shares rise or fall after earnings?

Tilray Brands is changing

Tilray is a top Canadian company in the cannabis industry. Over the years, the company has worked to change amd diversify its business, mostly by investing heavily in the alcoholic beverage sector. 

Tilray has acquired several alcoholic brands in the past few years. It bought brands from AB InBev, the biggest alcohol manufacturer in the world in 2023. And last year, it acquired a few other brands from Molson Coors. 

It is clear why Tilray Brands is doing that as the cannabis industry has not lived to expectations, with other large players in the sector reporting weak numbers. The regulatory framework in the United States has also not moved as was initially expected. 

Hopes of more regulatory clarity were dashed recently when Donald Trump won the presidency and Republicans won the Senate and the House of Representatives. Historically, the Grand Old Party has opposed cannabis bills. 

Therefore, there is a likelihood that the cannabis banking bill that has been in consideration for years will not see the light at the end of the day, at least in the next four years. There is also a risk that the cannabis rescheduling into a less dangerous drug will not happen. 

Tilray Brands earnings ahead

The next important Tilray Brands stock catalyst will be its financial results, which are expected to happen on January 10. 

These results will provide more color about whether the company’s business was growing or not. Most importantly, they will give details about its loss-making trajectory and whether the management is making progress. 

Additionally, these numbers will give more color about whether its diversification efforts are working. 

The most recent financial data showed that its revenue rose by 13% in the last quarter to $200 million. Most of this growth was because of its alcoholic beverage acquisitions.

The beverage alcohol net revenue rose by 132% to $56 million during the quarter. This growth will likely continue as its results will include the brands it bought from Molson Coors. 

By investing in alcohol, the company also hopes that it will provide more profits since the business has a gross margin of 41% compared to cannabis 40%.

The cannabis segment made $61.2 million during the quarter, while its distribution and wellness made $68.1 million and $14.8 million, respectively. 

Wall Street analysts expect that the revenue will come in at $216 million, a 11.6% increase from the same period a year earlier. Its annual revenues are expected to br $902 million, followed by $954 million in the next financial year.

Tilray Brands will also continue to narrow its annual loss per share to 0.08 cents to 0.03 cents in the next year. 

Tilray stock price analysis

The weekly chart shows that the TLRY share price has been in a consolidation phase in the past few years, as we wrote here. It recently dropped below the key support level at $1.52, its lowest level in 2023 and the most part of 2024. This price was also the lower side of the descending triangle chart pattern, a popular continuation sign. 

The stock has moved below all moving averages, while the accumulation and distribution indicator has continued falling. 

Therefore, with sentiment for the stock so low, a strong bullish breakout cannot be ruled out. If this happens, the stock will likely rise to $1.83, its highest swing on November 4. 

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