Cannabis Stocks’ Valuation Multiples in October: A Comparison



Forward EV-to-sales ratios

In the previous part of this series, we saw that the overall median forward EV[1. enterprise value]-to-EBITDA ratio for nine Canadian cannabis companies (HMMJ) fell 30% month-over-month to 33.5x on October 8. Let’s see how the valuation multiples of those nine companies have performed individually.

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Cannabis companies

In the above chart, four companies were above the median of 43.2x, and four were below. Aurora Cannabis (ACB) (ACBFF) was trading at a forward EV-to-EBITDA multiple of 43.2x on October 8. Tilray’s (TLRY) multiple was 536.4x, which is much higher than the other eight companies. Its multiple over the last month increased 88% from 284.9x.

Canopy Growth (WEED) was trading at 81.2x on October 8, a 22% month-over-month increase from 66.4x. Hexo (HEXO) was trading at 63.8x, a 20% rise from 53.3x in September. Next was Cronos Group (CRON) at 59.3x, which was above the median. However, it was an 8% month-over-month decline from 64.7x.

Now let’s look at the companies trading below the median. OrganiGram’s (OGRMF) forward EV-to-EBITDA ratio was 24.7x on October 8 compared to 22.1x in September, a 12% increase. CannTrust’s (CNTTF) multiple rose 19%, from 17.2x to 20.4x. Aphria’s (APHQF) multiple was 17.8x, down 19% from 21.9x. Supreme Cannabis (SPRWF) saw a steep fall of 86% to 8.9x compared to 61.8x in September.

For ongoing updates on the Cannabis sector, be sure to visit Market Realist’s Healthcare sector page.


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