Investment Thesis
Tilray is fundamentally unprofitable with negative operating and free cash flows, indicating the core business is not generating value. Despite a strong balance sheet providing near-term cushion, the company's inability to reach profitability combined with modest 4.1% revenue growth and significant annual cash burn of $64.7M presents substantial downside risk without demonstrable operational turnaround.
Strengths
- Strong liquidity position with current ratio of 2.79x and $204.6M cash
- Conservative leverage with 0.08x debt-to-equity providing financial flexibility
- Positive revenue growth of 4.1% YoY in declining market segment
- Gross margin of 26.8% indicates reasonable product-level economics
Risks
- Sustained operating losses with -$31.8M operating cash flow unsustainable long-term
- Negative free cash flow of -$64.7M annually with no clear path to profitability
- Net losses of -$71.8M and negative ROE/ROA indicate value destruction
- At current burn rate, cash runway limited to 3+ years without profitability improvements
- Negative interest coverage ratio of -1.1x indicates inability to service debt from operations
Key Metrics to Watch
- Operating cash flow trend - must turn positive
- Free cash flow burn rate and cash runway remaining
- Path to operating profitability and positive net income
- Gross margin sustainability and cost structure reduction
Financial Metrics
Revenue
633.7M
Net Income
-71.8M
EPS (Diluted)
$-0.65
Free Cash Flow
-64.7M
Total Assets
2.1B
Cash
204.6M
Profitability Ratios
Gross Margin
26.8%
Operating Margin
-7.3%
Net Margin
-11.3%
ROE
-4.6%
ROA
-3.5%
FCF Margin
-10.2%
Balance Sheet & Liquidity
Current Ratio
2.79x
Quick Ratio
1.66x
Debt/Equity
0.08x
Debt/Assets
26.5%
Interest Coverage
-1.13x
Long-term Debt
129.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-17T13:27:21.754252 |
Data as of: 2026-02-28 |
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