Tilray Brands Inc (NASDAQ: TLRY) soared more than 15% today as retail investors continued to grow their positions in the cannabis and alcohol company.
TLRY share price rally resembles meme stock frenzies of the past since the New York based firm did not make a corporate announcement, issue an earnings update, or receive bullish coverage from a Wall Street analyst on Tuesday.
Including today’s rally, Tilray stock is up more than 100% versus its year-to-date low in late June. Without a clear catalyst, however, investors are left wondering: is this a breakout or just another speculative blip?
Alliance Global lowers price target on Tilray stock
TLRY share price rally is all the more confusing given analysts at Alliance Global Partners actually issued a bearish note on the cannabis stock on Tuesday.
The investment firm lowered its price target on Tilray stock this morning to 75 cents only, which is roughly in line with the price at which it’s trading at the time of writing.
Alliance cited ongoing weakness in both cannabis and alcohol sales, which together make up the bulk of the company’s revenue and gross profit. International cannabis demand has softened, and alcohol sales are under pressure from shifting consumer preferences, it added.
That made the firm’s analysts lower their earnings expectations for the full year. Note that Alliance currently rates Nasdaq-listed firm at “neutral” only.
Fundamentals remain an overhang on TLRY shares
Investors should consider selling Tilray shares into the strength on Tuesday as the cannabis firm’s fundamentals remain deeply concerning.
Tilray Brands Inc hasn’t posted a profit since 2018 and has never generated positive free cash flow. More importantly, even the most optimistic projections don’t expect profitability until 2029.
Meanwhile, the NY based company continues to burn cash and dilute shareholders, with more than 1 billion shares outstanding.
Its cannabis business faces intense competition and regulatory uncertainty, while its alcohol segment – once seen as a diversification play – is now struggling to deliver growth.
For a company with declining margins and no clear path to sustainable earnings, today’s rally looks more like noise than signal.
Note that TLRY stock doesn’t pay a dividend either to appear any more attractive for the income investors in second half of 2025.
Tilray stock recommendation: capitalise on the rally and sell
Tilray’s sudden price spike may tempt traders to chase momentum, but long-term investors should tread carefully.
The lack of a credible catalyst, coupled with deteriorating fundamentals and bearish analyst sentiment, suggests that this rally could be short-lived.
While TLRY shares may continue to attract speculative interest, its underlying business remains fragile.
Unless Tilray stock can demonstrate consistent cash flow and margin improvement, today’s pop may be best viewed as an opportunity to exit rather than enter. In short: selling into strength might be the smartest move here.
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