Should you sell your Tilray stock?

Haywood Capital Markets analyst Neal Gilmer said in an Oct. 10 research report that Tilray Brands (Tilray Brands Stock Quote, Chart, News, Analysts, Financials TSX:TLRY) delivered fiscal Q1/F26 results broadly in line with expectations, prompting him to maintain his “Hold” rating while raising his target price to C$1.80 from C$0.60.

“We recommend holding for optionality to longer-term international and U.S. exposure,” Gilmer said. “Tilray remains a prominent player in the Canadian cannabis landscape and we are encouraged by the international opportunities, as well as the expanding beverage segment in the United States. However, we remain cautious on the overall organic growth the company has been able to achieve but recognize the diversification of its business segments.”

Tilray reported net revenue of US$209.5-million and Adjusted EBITDA of US$10.2-million for the quarter ended Aug. 31, compared with Haywood’s forecast of US$204.7-million and US$10.6-million, and consensus at US$205.8-million and US$10.3-million. Revenue increased 4.7% year over year and declined 6.7% sequentially. The company’s adjusted gross margin of 27.4% was below Gilmer’s 30% estimate and last year’s 29.9%, but cost reductions helped maintain EBITDA in line with expectations.

Cash used in operations improved by US$34.0-million year over year to US$1.3-million, with Tilray ending the quarter holding US$264.8-million in cash and marketable securities against US$252.9-million in debt.

In its beverage segment, results were flat versus the prior year as management continued optimizing post-acquisition operations. Gross margins fell to 38.3% from 41.3% last year, though the company said its Project 420 cost-saving initiative had achieved US$25-million in annual savings, on track to reach US$33-million.

The cannabis division generated US$64.5-million in net revenue, up 5.3% year over year on higher adult-use and modest international sales. Sequentially, international revenue declined due to permitting delays in Portugal, which management expects to resolve soon.

Tilray reiterated its fiscal 2026 Adjusted EBITDA guidance of US$62–72-million, implying growth of 13–31% over fiscal 2025. Gilmer said he made only minor changes to his model following the results. “Tilray shares have rallied significantly over the past three months, increasing 154.7%. While we view the valuation as becoming expensive, the momentum is clearly supported by the market.”

Gilmer said Tilray should generate US$65.4-million in Adjusted EBITDA on US$866.5-million in revenue in fiscal 2026, improving to US$69.1-million on US$901.6-million in fiscal 2027.

His revised C$1.80 target is based on a 2.5× EV/revenue multiple on fiscal 2027 estimates, discounted at 15%.

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.

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