2023-06-28 00:49:42 ET
Cannabis stocks are in trouble as investors question their going concerns risks. Most of them have plunged by double digits this year as their bankruptcy risks rise. SNDL ( NASDAQ: SNDL ) stock price has fallen by over 38% in 2023 while Tilray ( NASDAQ: TLRY ) shares are down by over 41%. In the same period, the Nasdaq 100 index has soared by double digits.
TLRY and SNDL are cash incinerators
Most cannabis companies have been cash burners in the past few years. Tilray Brands, one of the biggest players in the industry, made a net loss of over $1.78 billion in the past four quarters. It had previously lost over $434 million in its last financial year. These losses have increased even as the company’s revenue growth continued.
In the most recent quarter, Tilray said that its revenue increased slightly to $154.2 million while its gross ross jumped to $11.7 million. The company hopes to turn cash flow positive later this year, as we wrote here . Tilray Brand’s total market cap has crashed from over $9 billion in 2021 to just over $1 billion today.
Meanwhile, SNDL has also seen its total market cap crash from over $4 billion to about $325 million. Its financials show that the company’s revenues increased from over $49 million in 2019 to $663 million in the TTM. While this is impressive growth, losses have also grown in this period. Net loss jumped to $273 million in the TTM.
SNDL’s cash reserves are dwindling. The last report showed that it had over $182 million in cash and short-term investments down from $510 million in 2021. Unlike other cannabis stocks, SNDL does not have any debt.
The challenge for TLRY and SNDL Growers is that demand seems to be growing at a slower pace than expected. At the same time, federal legislation on marijuana in the US has found resistance among Republicans, creating uncertainties.
Tilray stock price forecast
The daily chart shows that the TLRY stock price has been in a strong bearish trend for a while. It recently crossed the important support level at $2.58, the lowest point in September last year. The shares remain below all moving averages while the daily volume has retreated. It has failed to fill the down gap that happened in March after its weak results.
Therefore, the Tilray share price will continue falling as sellers target moves below $1 in the coming months.
SNDL share price analysis
The SNDL stock price has been in a freefall for a while. This collapse has led to lower volumes since many cannabis investors have abandoned ship. The shares have moved below the 25-day and 50-day moving averages and the crucial support at $1.29. Therefore, the outlook is dim as concerns about the industry continue.
The post SNDL, Tilray stock price forecast: plot thickens for cannabis stocks appeared first on Invezz .