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Which Cannabis Stocks Are above Peer Median Valuation Multiple?

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Comparing EV-to-sales

In the earlier part of this series, we discussed that the overall cannabis sector’s forward EV-to-sales (enterprise value to sales) trended lower in the last month. In this part, we’ll look at the cannabis companies’ (HMLSF) valuation multiple compared to the median of 9.3x.

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Where do they stand?

As of July 10, Canopy Growth (WEED) (CGC) was trading at a forward enterprise-value-to-sales multiple of 23.7x, which was down from 95x a month ago. Aurora Cannabis (ACB) (ACBFF) was trading at 11.1x its forward sales, which rose from 10.7x a month ago. Aphria (APHQF) was trading at 11.7x, which was unchanged from last month, and Cronos Group (CRON) was trading at 10.2x, which was unchanged from last month. MedReleaf (MEDFF) was trading at the median forward sales multiple of 9.3x. However, it was down from 19.3x a month ago. Note that all these stocks were trading at or above the overall median of 9.3x.

In contrast, the stocks that were trading below the median are as follows:

  • OrganiGram was trading at 5.0x, down from 5.8x
  • CannTrust Holdings was trading at 3.9x, down from 4.3x
  • Supreme Cannabis was trading at 6.7x, down from 7.4x
  • Hydropothecary was trading at 6.7x, up from 6.5x

Next, we’ll revisit EV-to-EBITDA multiples for these companies and look at how they changed over the last month.

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