TLRY 1Q26 - Selling weed is profitable. Bull case $5.00

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October 09, 2025

Tilray Brands - Q4 Fiscal 2025: Cannabis Margins Soaring, Germany Crushing It +134%, Losses Pile Up

TILRAY BRANDS (TLRY)

🌿🍺 Cannabis + Beverage Play | Q1 Record Revenue $210M, PROFITABLE!, NASDAQ Compliant, 1B Shares Traded/Month

Q1 FY2026 | Net Income $1.5M (First Profit!), Cash $265M, Debt Down, Stock Up 24% Today on Momentum

💰 Market Cap: $1.9B | 🏢 Employees: 2,500 | 📊 Adj EBITDA: $10.2M (Q1)
👨‍💼 CEO Irwin Simon | 🌍 40+ Brands | 🎯 20+ Countries | 💊 Net Debt 0.07x EBITDA
$2.13
📈 +$0.41 (+23.8%) Today | +$1.78 (+508%) From June Low
Current Price
Price Target Scenarios

18-Month Price Targets (Stock at $2.13 Today)

$5.00
Bull Case (+135%)
US Legalization
Profitability Arrives
📊 Valuation Calculation:
• 2026E Revenue: $1.1B × Revenue Multiple: 4.5x = $5B Market Cap = $5.00/share
🚀 Key Assumptions:
US legalization • Germany explodes 5X • Europe follows • Beverage turnaround • 50%+ cannabis margins • Hit $1B+ US revenue • Profitability scales • Acquisitions accelerate
$3.00
Base Case (+41%)
Continued Growth
Momentum Sustained
📊 Valuation Calculation:
• 2026E Revenue: $950M × Revenue Multiple: 2.8x = $2.7B Market Cap = $3.00/share
⚖️ Key Assumptions:
Momentum continues • Germany/Europe growing strong • Cannabis margins 40%+ • Beverage improves • 10-15% revenue growth • US rescheduling optimism • EBITDA guidance met • Cash flow positive • Market rewards cannabis leader
$0.50
Bear Case (-77%)
Dilution Hell
Losses Continue
📊 Valuation Calculation:
• 2026E Revenue: $800M × Revenue Multiple: 0.65x = $520M Market Cap = $0.50/share
🔻 Key Assumptions:
No US legalization • Germany slows • Margins compress • Beverage bleeds • More impairments • Heavy dilution • Cash burn returns • Competition intensifies • Revenue declines
TL;DR - What You Need To Know
🌿
The Cannabis Bet
Pure speculation on US legalization. Cannabis margins 44% (up 700bps). Germany +134% in Q4. #1 in Canada, dominating Germany. US legalization = THE catalyst. Without it? Just an international play. With it? Massive.
🎉
First Profitable Quarter!
Q1 FY2026: Net income $1.5M (finally!). Record Q1 revenue $210M (+5%). Cash flow improved $35M. NASDAQ compliant. 1B shares traded monthly. Net debt 0.07x EBITDA. Progress is real.
📈
Why Bulls Are Buying
Profitable! Canadian adult-use +12%, int'l +10%. Germany permits flowing. CC Pharma (13K drugstores) integrating. Delta-9 drinks in 14 states. Bitcoin strategy. Project 420 $25M saved. 1B shares traded monthly = massive interest.
⚠️
What Could Wreck This
Up 508% from June, +24% today - ran too far? Analyst targets $1-2, stock $2.13. ATM dilution ($22.5M). Margins razor-thin (0.7%). Cannabis 36% vs 40%. Beverage flat. Portugal/Germany risks remain.

📊 Q1 FY2026 Results: PROFITABILITY ACHIEVED! Revenue Growth Across All Segments

HISTORIC: First profitable quarter! $1.5M net income on record Q1 revenue $210M (+5%). All segments grew except beverage (flat by design). NASDAQ compliant. 1B shares traded monthly. Cash flow +$35M. Net debt 0.07x. Finally turning the corner.

✅
$0.00
Q1 EPS
First Profitable Quarter!
💰
$210M
Q1 Revenue
+5% YoY Record Q1
📈
+12%
Canada Adult-Use
Leading Market Share
💵
$265M
Cash on Hand
0.07x Net Debt/EBITDA

📞 Key Q1 FY2026 Earnings Highlights

🎊
First Profitable Quarter Ever!
Net income $1.5M (EPS $0.00). Record Q1 revenue $210M (+5%). All segments grew except beverage (flat by design). Adj EBITDA $10.2M vs $9.3M. Cash flow improved $35M swing! Balance sheet strengthening fast. This is the turning point.
🍁
Canada Crushing It - #1 In Flower
Canadian adult-use +12% (only top 5 LP growing share). Closed gap to #1 by 53bps. Hit #1 in flower, pre-rolls, beverages, oils, chocolate. Pricing UP 2% while market down 1.3%. Good Supply = $250M brand. 5M sq ft, 200+ metric tons capacity ready for US.
🌍
International & Distribution Growing Fast
Int'l cannabis +10% to $13.4M (Portugal permits now flowing). Distribution +9% to $74M. CC Pharma: 13K German drugstores - vertically integrating cannabis. Europe 21 metric tons, can scale 3X. Italy licensed. Spain partnership active. Germany permits fixed.
🚀
Beverage Innovation & Wellness Expanding
Beverage flat at $55.7M (SKU cuts). Innovation working: Shocktop +49% Southeast, Runner's High top 15 non-alc. Delta-9 drinks in 14 states, 10mg format. Total Wine, ABC, ShopRite distribution. Wellness +3% to $15.2M, in 17K+ retailers. Bitcoin coming.

📍 CEO Irwin Simon: "Strategic focus strengthening profitability and balance sheet." Stock NASDAQ compliant, 1B shares traded monthly Aug/Sept. "Not a lot of companies trade 1B shares monthly."

🎯 US Medical Opportunity: $10B market. Tilray targeting 3-5% = $300-500M. Ready via: (1) 5M sq ft Canadian facilities, (2) 200+ metric tons capacity, (3) European medical expertise, (4) pharma partnership, or (5) acquisition. Balance sheet ready.

🚀 Brand Building: Good Supply = $250M brand (no advertising allowed!). #1 in flower, pre-rolls, beverages, oils. Shocktop trends up 30pts since '23. Runner's High top 15 non-alc, 4th fastest growing. "Making beer fun again."

🔮 What's Next: FY2026 guidance: Adj EBITDA $62-72M. Project 420 hit $25M (target $33M). Int'l cannabis growing 3X via CC Pharma. Delta-9 expanding (10mg format). Bitcoin payments enabling. Wellness in 17K+ stores. Q2 early 2026.

🚀 Why TLRY Bulls Are Right
✅
Profitability Finally Achieved
First profitable quarter: $1.5M net income. Cash flow $35M swing. Net debt 0.07x EBITDA = zero leverage. NASDAQ compliant. 1B shares traded monthly. Revenue growing all segments. Without US legalization they're profitable - imagine with it.
🍁
Canadian Dominance Is Real
Only top 5 LP growing share. #1 in flower. Adult-use +12%, pricing UP 2% while market down. Good Supply = $250M brand (no ads!). 5M sq ft, 200+ metric tons. 10-year head start vs anyone entering US. When US opens, ready day one.
🌍
CC Pharma Is The Secret Weapon
13K German drugstores. Vertically integrating cannabis distribution now. Medical footprint 3X growth in FY2026. Portugal permits flowing. Italy licensed. Spain active. 21 metric tons capacity, can scale big. Can't be replicated fast.
💰
Balance Sheet = Strategic Optionality
$265M cash. 0.07x net debt. Can do M&A. CEO ready to partner pharma or buy into US medical. Project 420 saved $25M. Raised $22.5M ATM when strong. Firepower for US rescheduling or acquisitions.
🐻 Why TLRY Bears Have Valid Concerns
📉
Profitability Is Paper Thin
$1.5M profit on $210M = 0.7% margin. One bad quarter = losses return. Gross margin dropped 30% to 27%. Cannabis margins fell 40% to 36% (re-entered low-margin vapes). Profitability extremely fragile.
💸
ATM Dilution Already Started
Raised $22.5M via ATM (diluting). $5M convertibles for equity (more dilution). Need cash for growth = more dilution. 1B shares monthly = extreme volatility. Retail hype disappears fast without catalysts.
🍺
Beverage Still Isn't Working
Beverage flat. Margins 38% from 41%. Project 420 saved $25M targeting only $33M total. Closed 3 facilities, cut 20K+ SKUs, still no leverage. Craft beer market brutal. Acquisitions may be mistakes.
⏰
Still Waiting On The Big Catalyst
5% growth not explosive. No US rescheduling = slow story. Portugal issues could return. Germany quota risks. European reform slow. Stock ran hard on speculation - what if US legalization takes 5 more years?

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.