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

Worker tags plants at an industrial cannabis operation
Cannabis Stocks

Can Canopy Growth Stock Finally Recover in 2024?

Down 98% from all-time highs, Canopy Growth remains a high-risk investment in 2024 given its weak fundamentals.

Read more »

A close up image of Canadian $20 Dollar bills
Tech Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

These three stocks are easy buys for those who don't have all that much to spend, and want long-term growth…

Read more »

Pot stocks are a riskier investment
Cannabis Stocks

Slow Burn: Is Aurora Cannabis Finally a Good Buy in June?

One of the benefits of choosing from some of the most beaten-down market segments like cannabis is that even a…

Read more »

Caution, careful
Cannabis Stocks

I Wouldn’t Touch This TSX Stock With a 60-Foot Pole

I wouldn't touch Canopy Growth Corp (TSX:WEED) stock with a 60-foot pole.

Read more »

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

Why This Little-Known Cannabis Stock Could Double in 2024

This cannabis stock has already doubled this year since 52-week lows and could easily rise that much once more.

Read more »

Bad apple with good apples
Cannabis Stocks

1 TSX Stock I Wouldn’t Touch With a 420-Foot Pole

Down 87% from all-time highs, Cronos Group stock is a still a high-risk investment for long-term shareholders in 2024.

Read more »

A cannabis plant grows.
Cannabis Stocks

Canopy Growth: Buy, Sell, or Hold?

Canopy Growth (TSX:WEED) stock should make a killing on U.S. expansion, but investors will need to be very patient.

Read more »

Marijuana plant and cannabis oil bottles isolated
Energy Stocks

3 Canadian Value Stocks to Buy Right Now

Undervalued Canadian stocks such as Secure Energy should be part of your shopping list in May 2024.

Read more »