Analyzing the Cannabis Sector’s EV-to-EBITDA Multiple



Forward EV-to-EBITDA multiple

In this part of the series, we’ll discuss the forward EV-to-EBITDA median multiple of nine cannabis stocks as of October 23.

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In the above chart, the yellow line represents the median EV-to-EBITDA multiple of nine cannabis stocks including Canopy Growth (WEED), Aurora Cannabis (ACBFF), Aphria (APHQF), and Tilray (TLRY). The median EV-to-EBITDA of the nine cannabis stocks as of October 23 stood at 34x, which declined from 44.6x as of October 9 when we published a similar update.

When we look at the average level of 33.4x since January 2017, we see that cannabis stocks might have corrected. The conclusion is similar to what we determined when we looked at the median forward EV-to-sales multiple for the cannabis sector in the above chart. The market sentiments (MJ) are running at an all-time low. There could be more selling in the cannabis space in the coming days.

Next, we’ll compare the nine cannabis stocks’ current and previous levels since our last update on October 9.


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