Down 40% this year. Will Tilray Brands stock perform significantly better in 2025?

Marijuana legalization doesn’t seem to be on the horizon any time soon. And because of the lack of enthusiasm in the industry, many cannabis stocks are in big trouble. Tilray brands (NASDAQ:TLRY) is no exception as the company appears to be on track for another difficult year, with its share price down more than 40% so far in 2024 entering trading on Monday.

But given that the stock has not only taken such a hit this year, but has fallen more than 90% over the past five years, can we expect a recovery in 2025 given improving financials?

Miss the morning report? Wake up with Breakfast News in your inbox every market day. Register for free »

Although there haven’t been many enticing growth opportunities for Tilray in the cannabis industry in recent years, the Canada-based company has been looking for other ways to expand its operations. A good example of this is in the beverage space, where Tilray has acquired several alcohol brands. This has allowed the company to expand to additional locations across the U.S., potentially putting it in a better position for the day marijuana is legalized in the country (though there’s no guarantee that will happen any time soon or will happen at all). ).

In its most recent quarterly results, which covered the three-month period ended August 31, Tilray’s net revenue recently hit $200 million. And a big reason for the 13% increase in revenue compared to the same period last year was the company’s beverage sales more than doubled during that time, as acquisitions helped boost Tilray’s sales in that segment.

Unfortunately, due to high overhead costs, the company has not made sufficient progress on costs; Tilray suffered a net loss of $34.7 million in its most recent quarter. While that was an improvement from a total loss of $55.9 million a year ago, it also highlights how difficult it is for the company to stay out of the red.

The last time Tilray stock finished a year higher was in 2018, when shares rose more than 215%. This year, Canada legalized marijuana for recreational use. And unless a similar catalyst emerges for Tilray and the cannabis industry as a whole, 2025 could be another difficult year for the stock.

While Tilray has made good, incremental gains over the past few years to expand its operations, much of the bullish sentiment around the company ultimately comes down to hopes that the US will legalize marijuana and the growth opportunities that open up for Tilray would. With greater uncertainty over whether a Republican administration incoming next year will support legalization, 2025 could be another disappointing year for struggling cannabis stocks.

The story continues