Earlier in this series, we discussed how the average forward EV-to-sales multiple of nine Canadian cannabis (MJ) stocks were trading at an all-time low of 4.6x. Let’s look at each of the nine cannabis stocks that are part of the average multiple below.
Comparing the industry
Four stocks in the above chart are clearly trading above peers’ median of 4.6x, while four are trading at a discount to the median. OrganiGram (OGRMF) was trading right at the median at a forward EV-to-sales multiple of 4.6x. However, OrganiGram was trading at a discount to its level a month ago at 6.11x.
Four stocks were trading at a premium to peers’ median. Tilray (TLRY) was trading at a forward multiple of 67.3x but at a discount to its level a month ago at 74.2x. Canopy Growth (WEED) was trading at a premium to peers’ median at 19.2x but at a discount to its multiple at 21.0x last month. Cronos Group (CRON) was trading at a multiple of 25.0x and at a premium to its level at 15.7x last month. Aurora Cannabis (ACB) was trading at a premium to peers’ median at 8.5x but at a discount to its level at 10.1x last month.
Recently, Cronos got a boost from Altria’s 45% acquisition, which boosted the valuation multiple.
The stocks that traded at a discount to peers’ median include CannTrust (CNTTF) at 3.6x, HEXO (HEXO) at 3.2x, Aphria (APHA) at 2.6x, and Supreme Cannabis (SPRWF) at 2.3x. All of these stocks traded at a discount to last month’s level, which indicates that they’re relatively cheaper.
Next, we’ll discuss the EV-to-EBITDA multiple.