Analyst Slashes Price Target for Tilray Amid Diverging Business Performance

Tilray US88688T1007

A leading market research firm has dramatically reduced its valuation target for Tilray Brands, despite the cannabis company reporting quarterly revenue that surpassed Wall Street's forecasts. The move highlights growing concerns over profitability and specific underperforming business units, casting a shadow over areas of operational growth.

In a significant revision, Roth Capital Markets analyst Bill Kirk maintained a "Neutral" rating on Tilray's stock but executed a severe cut to its price objective. The target was reduced by half, falling from $20.00 to $10.00 per share. This decision underscores a substantially more cautious view of the company's fundamental value and future prospects. The adjustment is particularly notable as it follows a quarterly report that showed top-line strength, suggesting analysts are looking beyond mere revenue growth to deeper financial health indicators.

Quarterly Results Paint a Mixed Picture

Tilray's financial results for its second quarter of fiscal 2026 revealed a company on two distinct trajectories. Net revenue reached $217.5 million, notably exceeding the consensus estimate of $210.9 million. The company also reported an adjusted EBITDA of $8.4 million.

This revenue performance was driven by strength in several core divisions:
* International Cannabis: Revenue surged 36% to $20.2 million.
* Canadian Cannabis: Sales rose 6% to $62.4 million.
* Distribution: This segment grew 26%, generating $85.3 million.

However, these gains were severely offset by a sharp decline in the beverage alcohol division. Sales in this segment contracted by 20.6% to $50.1 million. Compounding the issue, the company's overall gross margin deteriorated by 260 basis points to 26.4%, applying further pressure to earnings potential.

Management Holds Firm on Full-Year Guidance

Despite the uneven performance across its portfolio, Tilray's executive team reaffirmed its financial outlook for the full 2026 fiscal year. The company continues to project adjusted EBITDA in the range of $62 million to $72 million, which would mark an improvement over the prior year's result of approximately $55 million. Total revenue guidance remains set at $870.8 million.

Investor reaction has been muted. Shares on Tradegate were recently trading slightly lower at €7.95, while the U.S. closing price was $9.45. The substantial price target cut from Roth Capital now establishes a new benchmark for the stock's perceived valuation ceiling, emphasizing the market's focus on profitability challenges alongside revenue growth.