Tilray price target chopped at Roth Capital

Roth Capital Markets analyst Bill Kirk said in a July 30 note that Tilray’s (Tilray Stock Quote, Chart, News, Analysts, Financials NASDAQ:TLRY) fourth-quarter results were mixed, with revenue of $224.5-million slightly below the consensus of $232.2-million, but Adjusted EBITDA of $27.6-million coming in above the $24.9-million estimate. Kirk maintained a “Neutral” rating and lowered his 12-month price target to $0.60 from $0.65.

Tilray recorded a $1.4 billion impairment charge tied to acquired intangible assets, bringing total FY2025 charges to $2.1 billion and $3.5 billion since FY2019. Management cited improving profitability via ongoing cost-cutting, beverage SKU rationalization, and new product launches. Despite leading Canada’s adult-use market with a 9.4% share, Tilray may face growth pressure from recent German regulatory changes.

Tilray is a Canadian cannabis and consumer packaged goods company with operations across Canada, Europe, Latin America, and the United States. Formed through its 2021 merger with Aphria, Tilray cultivates and distributes cannabis for medical and recreational use, and also operates in the alcohol, wellness, and pharmaceutical distribution sectors. Its cannabis products are sold under multiple brands in more than 20 countries, primarily through partnerships with national distributors and retail channels.

“Upside for Tilray, unfortunately, will be predominantly determined by U.S. legislative outcomes,” Kirk said. “Tilray’s fundamentals are improving: first, the cannabis pricing environment has stabilized, and international demand is helping ease supply levels in Canada; second, beer production and efficiency are expected to improve segment profitability; and third, the company has leading exposure to a favorable supply-demand dynamic in Germany, even with regulatory changes. That said, the lack of legislative progress in the U.S. still outweighs other considerations.”

Earlier this week, Tilray reported fourth-quarter fiscal 2025 net sales of $224.5-million, below the $232.2-million consensus, but up from $185.8-million in Q3. Adjusted EBITDA came in at $27.6-million, ahead of the $24.9-million consensus and up from $9.0-million in Q3. Gross margin was 30%, improving 200 basis points sequentially but down around 580 basis points year-over-year. Tilray introduced fiscal 2026 Adjusted EBITDA guidance of $62–72-million, lower than the prior consensus of $83.1-million and based on $55-million in fiscal 2025. About $8-million in Q4 sales were delayed due to permitting issues in Portugal. Looking ahead, the company expects its beverage segment to strengthen, driven by SKU rationalization, brand integration, and better facility leverage.

Kirk thinks that Tilray will do $55.0-million in Adjusted EBITDA on revenue of $821.3-million in fiscal 2025, slightly raising his EBITDA estimate from $53.3-million but trimming revenue from a prior $829.0-million. For fiscal 2026, he expects Adjusted EBITDA to improve to $64.0-million on revenue of $868.1-million, marking a substantial downgrade from his earlier projections of $83.2-million and $874.2-million, respectively. The reduced 2026 outlook reflects a more cautious stance on the pace of margin expansion and revenue growth across segments.

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