Tilray Brands (NasdaqGS:TLRY): Examining Valuation After DOJ Cannabis Rule Setback and Nasdaq Compliance Challenges

If you’ve been following Tilray Brands (NasdaqGS:TLRY), you know today’s news is less about smooth sailing and more about stormy seas. The Department of Justice has canceled pending cannabis rules, a regulatory move that hits not just Tilray but the entire industry, especially for companies hoping for clearer federal guidance. Add in the fact that Tilray is once again wrestling with Nasdaq’s minimum bid price rule, and management is already floating options like a reverse stock split to fend off delisting. The pressure is unmistakable, raising the stakes for investors trying to decide if there’s upside left in the story.

This turbulence comes after a stretch marked by big swings in Tilray’s share price. Despite some positive steps, such as expanding its medical cannabis portfolio in Europe and forging new distribution deals in the U.S. spirits market, the numbers tell a different tale. Over the year, the stock’s momentum has faded: shares have dropped 33% and are still deeply negative over the past three years. Even with rebounds of more than 7% in the past week and a sharp 218% gain in the past three months, the longer-term trend remains under considerable pressure, reflecting shifting views on the company’s financial resilience and future.

So, after such swings and regulatory uncertainty, is the market missing potential value here, or is every possible catalyst already baked into Tilray’s price?

Most Popular Narrative: 24.1% Overvalued

The prevailing view among analysts is that Tilray Brands is currently trading well above its fair value. Their projections build in ambitious targets for margin expansion and improved profitability, but the gap between the current share price and what the numbers suggest is growing wider.

"Tilray's international cannabis business is achieving rapid organic growth, with European cannabis revenue up 112% YoY (excluding Australia) and significant share gains in Germany due to regulatory tailwinds, broader medical adoption, and expanding legalization, which supports a long runway for top-line revenue acceleration as global cannabis markets open."

Curious what’s fueling this bullish target? The story hangs on a set of daring projections that could redraw the map for Tilray’s top and bottom lines. The most popular narrative is betting big on several bold quantitative assumptions. If true, they could transform both company fortunes and investor outcomes. Want to uncover the surprising figures behind these estimates? Read the full analysis for the model behind the hype.

Result: Fair Value of $0.98 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent delays in U.S. cannabis legalization and steep ongoing losses could quickly derail these optimistic analyst projections for Tilray’s future.

Find out about the key risks to this Tilray Brands narrative.

Another View: Discounted Cash Flow Perspective

While analyst targets suggest Tilray Brands is overvalued, our SWS DCF model provides a different perspective. This approach examines future cash flows to estimate value and presents a new challenge to the prevailing narrative. Could this reveal hidden value that others have not considered?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding Tilray Brands to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Tilray Brands Narrative

If the story doesn’t align with your own analysis or you prefer to review the numbers independently, you can quickly develop your own perspective in just a few minutes. Do it your way

A great starting point for your Tilray Brands research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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