Curious about what to do with Tilray stock right now? You’re definitely not alone. Investors have been buzzing lately after Tilray shares surged nearly 51% over the past month, building on a 7% rise just this week. Despite this recent strength, the stock remains down roughly 50% over the past three years. That kind of volatility has many investors wondering if Tilray is entering a new growth phase or just catching a temporary wave.
The excitement surrounding Tilray has been fueled by renewed optimism in the broader cannabis industry. Shifting regulations and evolving investor sentiment are putting growth-oriented names like Tilray back in the spotlight. Still, according to recent undervaluation checks, the company scores a 3 out of 6 suggesting it may be undervalued on some measures but not across the board.
One way to assess Tilray’s value is through a Discounted Cash Flow (DCF) analysis, which estimates a company’s intrinsic worth by forecasting future cash flows and discounting them back to today’s value. For Tilray, the latest data shows Free Cash Flow (FCF) at negative $93.4 million, with projections turning positive and reaching $43 million by 2030. When these projections are discounted appropriately, the estimated intrinsic value comes out to around $1.14 per share indicating Tilray may currently be overvalued by roughly 47.7%.
Another way to evaluate Tilray is by comparing its Price-to-Sales (P/S) ratio with industry benchmarks. At 2.28x, Tilray trades below the pharmaceuticals industry average of 4.65x and far under its peer group average of 12.06x. Based on growth expectations and risk factors, its fair P/S ratio is estimated at 2.39x suggesting the stock is roughly in line with fair value.
This means Tilray may be fairly priced for now, offering neither a clear bargain nor a significant overvaluation.
Numbers tell one story but narratives bring the full picture to life. Creating a personal investment narrative allows you to connect your own expectations about Tilray’s growth, margins, and risk profile to a fair value estimate. One investor might see Tilray’s global expansion fueling a $1.50 fair value, while another could see ongoing industry headwinds limiting upside to $0.60.
by Yahoo Finance