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Tilray Brands (TLRY) has been in a strong downtrend and is now trading near its all-time low. The stock peaked at $4.94 in August and has since pulled back to $3.74. That decline will be tested on Thursday, when the company publishes its financial results before the market opens.
Tilray Brands will publish its Q1 earnings on Thursday
TLRY stock has slumped in the past few months as concerns about the cannabis and beverage industries continued. Cannabis stocks have retreated as investors wait for the finalization of the reclassification process in the United States.
Tilray Brands, which does not have cannabis operations in the United States, has said that it plans to enter the country once this happens. Such a move would be big because the US is one of the biggest markets in the world. Estimates are that the industry was worth about $39 billion in 2024, a figure that will have a CAGR of 11.5% through 2030.
Tilray Brands has also slumped because of its alcoholic beverages business, which the management has been assembling in the past few years. The challenge is that the industry is not growing as it did before. Indeed, top alcoholic beverage stocks like Constellation Brands, Molson Coors, and Boston Beer have been in a strong downward trend.
The next important catalyst for Tilray Brands is its upcoming earnings report, which will provide more hints on its business. The most recent results showed that its business did well in the fourth quarter, which showed that its revenue rising by 11% to $915 million.
This growth was spread across the board, with its cannabis segment rising by 8%. Its beverage business made $254 million, up by 6%, while the distribution and wellness grew by 21% and 9%, respectively. Part of this growth was driven by its acquisitions, including BrewDog, a top player in the craft beer industry.
Yahoo Finance data shows that analysts expect the upcoming results to show that its Q1 revenue rose by 27.5% to $266 million. Its earnings per share is expected to deteriorate to a loss of 14 cents. Tilray has missed its earnings estimates in the last four consecutive quarters.
Analysts have a mixed opinion on Tilray. TD Securities recently lowered its target from $4.70 to $4.50, while TD Cowen reduced its target from $7 to $5. The average target among analysts is $6.38, much higher than where it is today. Still, this target should be taken with caution as most of the ratings came out last year.
Tilray stock technical analysis
Tilray Brands stock chart | Source: TradingView
The daily chart shows that the TLRY stock has come under pressure in the past few weeks or months. Most recently, it has formed a descending channel and has just retested its upper side.
It has remained below the 50-day Exponential Moving Average (EMA), a sign that bears have prevailed. Additionally, it has remained below the Supertrend indicator.
Therefore, the stock will likely continue falling after its earnings. A move below the support level of $3.50 will point to more downside, potentially to $3. On the other hand, a move above the 50-day moving average of $4.23 will point to more gains.
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