Many valuation metrics suggest that Tilray Brands (TLRY -0.70%) is a screaming buy right now. Just look at the cannabis stock's price-to-sales ratio. Shares traded above 2.4 times sales roughly 12 months ago, yet now trade at just 0.6 times sales despite growing revenue.

This looks like a great entry point for growth investors. But before you jump in, there's one critical piece of information you should understand.

Tilray shares are still struggling with this challenge

Tilray's cannabis pharmaceutical business has grown by leaps and bounds over the years. Five years ago, the company was generating only $400 million in annual revenue. Since then, sales have more than doubled. But there's a problem: Profitability remains elusive, even as sales growth has stagnated.

When sales were growing rapidly, the market was willing to assign Tilray a premium valuation. Sure, the company was still generating losses, but that was an acceptable situation as long as revenue continued to grow quickly.

Next quarter, however, analysts now predict year-over-year revenue growth of just 13.5%. Roughly 12 months ago, estimates were calling for 26% revenue growth. This collapse has contributed to the share price decline and, thus, the sizable decline in its price-to-sales ratio.

But there's another factor that is weighing heavily on the share price right now.

TLRY PS Ratio data by YCharts

Over the past 12 months, Tilray has generated a net loss of around $250 million. That's a huge problem, considering that the entire company is now valued at just $620 million. To cover these losses, the company will need to either raise debt or massively dilute shareholders. Tepid revenue growth will likely not be enough to make the company profitable in 2025, with analysts still expecting a net loss in 2025.

"The gold rush is over," an industry insider told MarketWatch earlier this year. "Companies unable to scale or maintain profitability will face acquisition or closure." While Tilray isn't yet at that point, its long-term survival is now in question. So shares are cheap, but the risk remains very high too.