Tilray Stock Is Scraping 52-Week Lows: Will it Bottom Out Soon?

Tilray (TSX:TLRY) stock remains down 53% in the last year, but when will this company hit the bottom and start to recover?

| More on:
A cannabis plant grows.

Source: Getty Images

It’s been a difficult time for cannabis stocks, yet one of the worst cases has to be Tilray (TSX:TLRY). The company seemed to be doing so well just a few years ago. In fact, analysts believed it was well on the way to becoming the cannabis stock. Yet Tilray stock has most certainly fallen from grace. The question is, will it bottom out soon or start edging up?

Holding HEXO

One of the most controversial parts of Tilray stock these days is its acquisition of Hexo. The company wasn’t doing well, yet in swooped Tilray stock and picked it up. It certainly was a change from its acquisition of major cannabis producer Aphria a few years before.

The news that Tilray stock now owned 100% of Hexo came with its earnings report a few weeks ago. The company saw shares drop, as it reported another earnings loss for its second quarter. The loss hit US$61.6 million compared to a profit of US$5.7 million the year before.

Revenue also fell short of expectations at US$144.1 million, and, therefore, analysts were less than pleased. Sure, it continues to create acquisitions that should lead to long-term profits, but it has to actually make it there first.

Thinking big?

Tilray stock remains in a similar position to many other large cannabis producers, with cutting costs and these long-term profits at the forefront. In a statement during the earnings report, Tilray chief executive officer and chairman Irwin Simon stated, “We are close to achieving our increased annualized cost savings target of $130 million, consistent with our commitment to building a lean, efficient, and dynamic business that will realize tangible and immediate benefits as the market improves.”

That last part is important. When will the market improve? And when will Tilray stock be able to expand and potentially come the world’s largest cannabis producer? In fact, it remains the largest marijuana play in Canada.

While that’s all well and good, the United States is where things will really ramp up one day. The question becomes, “When?” Tilray stock is still sitting on over $400 million in cash just waiting for the U.S. to give a go ahead. But with an election coming in 2024, I wouldn’t hold my breath.

Bottom line

Tilray stock is down 53% in the last year and even more since all-time highs. While it was one of the first and only cannabis stocks to hit profitability, that looks to have gone up in smoke this year. And there really isn’t any clear sign as to when that could turn around.

Meanwhile, investors aren’t all that interested in growth stocks like Tilray stock once was. Instead, they want safety in these trying times. So, I still don’t believe the bottom has been achieved quite yet. That being said, by the end of 2023, there could be a turnaround, as investors see the potential opportunity that Tilray stock offers in the next decade.

For some, that’s just too long of a wait.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Cannabis Stocks

Powder of Cannabis (Drugs), Analysis of Cannabis in laboratory.
Cannabis Stocks

Canopy Growth: Is There Budding Potential in the Cannabis Market?

Canopy Growth stock hit 52-week lows recently on news of needing to re-file on its BIoSteel business, so what now?

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

What’s Happening With Cannabis Stocks in May 2023?

Cannabis stocks were up this week, as the market began to turn, but how long will it last, and is…

Read more »

Cannabis smoke
Cannabis Stocks

Are Cannabis Stocks a Good Buy in May 2023?

If you're going to buy cannabis stocks, these are pretty much the only two I would consider. Even so, you…

Read more »

edit Cannabis leaves of a plant on a dark background
Cannabis Stocks

Aurora Cannabis: Time to Light Up Your Portfolio?

Here's my take on whether Aurora Cannabis (TSX:ACB) is worth adding to a growth portfolio right now, given its growth…

Read more »

Target. Stand out from the crowd
Tech Stocks

These Undervalued TSX Stocks Are a Bargain in May 2023

If you're willing to bet on a rebound, these are the three TSX stocks I would consider first as they…

Read more »

Medicinal research is conducted on cannabis.
Metals and Mining Stocks

2 Canadian Stocks That Are Simply Too Cheap to Avoid

These two Canadian stocks have sunk lower and lower, which is why now could be the right time for long-term…

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

1 Marijuana Stock I’d Buy Over Aurora Cannabis

Explore a promising marijuana stock that outshines Aurora Cannabis. Unveil the investment opportunity to boost your cannabis portfolio.

Read more »

Cannabis stocks have fallen.
Cannabis Stocks

Is Canopy Growth Stock a Buy or a Sell in April 2023?

Canopy Growth stock is trading at a depressed valuation due to weak fundamentals. But does this make WEED stock a…

Read more »