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.
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.