What Happened?

Shares of cannabis company Tilray Brands (NASDAQ:TLRY) fell 19.7% in the afternoon session after the company reported weak fiscal third-quarter 2025 results that missed analysts' sales and EBITDA estimates, signaling ongoing challenges in growing its top line.

What stood out was the company's decision to scale back exposure to low-margin cannabis products and shift focus toward more profitable international markets. This choice, while aimed at improving margins, contributed to a double digit growth decline in cannabis revenue, making it harder to offset softness in other areas of the business.

Looking ahead, the company cut its full-year revenue forecast, citing sales impact from its ongoing restructuring efforts. Overall, this was a weaker quarter, highlighting critical growth issues.

The shares closed the day at $0.46, down 21.3% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Tilray? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Tilray’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. But moves this big are rare even for Tilray and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 13.5% on the news that the company reported underwhelming fourth quarter results. Its revenue and EBITDA missed significantly, and its gross margin fell short of Wall Street's estimates. Also, the company recorded significant operating losses and continued to burn cash.

On the other hand, revenue guidance for 2025 came in ahead of expectations, though sales partly benefited from recent acquisitions following the company's expansion to the beverage market, which suggested organic growth was not as strong. Zooming out, we think this was a mixed quarter. The market seemed to focus on the negatives, and the stock traded down.

Tilray is down 68.9% since the beginning of the year, and at $0.45 per share, it is trading 82.5% below its 52-week high of $2.59 from April 2024.

Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.

View Comments