How Does Planet 13’s Valuation Multiple Compare with Peers?



Valuation multiple

Planet 13 Holdings (PLTH) (PLNHF) is still in the growth phase of its business lifecycle. During this period, expenses will be on the higher side, and we can’t consider EPS for valuation purposes. So, we have opted for the forward EV-to-sales multiple.

As of January 15, Planet 13 Holdings was trading at a forward EV-to-sales multiple of 1.83x. The company was trading at a discount in comparison to peers MedMen Enterprises (MMEN) (MMNFF), Canopy Growth (CGC) (WEED), and Aurora Cannabis (ACB), who were trading at 4.23x, 28.05x, and 14.83x, respectively, on the same day.

Article continues below advertisement

Analysts’ recommendations

Of the three analysts that cover Planet 13 Holdings, one analyst has given the stock a “strong buy” rating, and two have given it a “buy” rating as of January 15. On average, they have set a 12-month price target of 4.83 Canadian dollars, which represents an upside potential of 149.0% from its stock price of 1.94 Canadian dollars.

On December 19, Northland Capital had initiated coverage on Planet 13 Holdings with an “outperform” rating and a price target of 3.75 Canadian dollars. Earlier, on December 7, Canaccord Genuity reinitiated the coverage on the company with a speculative “buy” rating.

Peer comparisons

Of the six analysts that cover MedMen Enterprises (MMEN) (MMNFF), all are favoring “buys” on its stock. On average, analysts have given MMEN a price target of 8.18 Canadian dollars, which represents a potential upside of 100.9% from its current price of 4.07 Canadian dollars.

Of the 11 analysts that track Canopy Growth (CGC) (WEED), 81.8% have given it “buys,” 9.1% have given it “holds,” and 9.1% have given it “sells.” On average, analysts have a price target of 64.43 Canadian dollars on the stock, which represents a potential upside of 17.4% from its current price of 54.90 Canadian dollars.

Of the five analysts that cover Aurora Cannabis (ACB), four have given it “buy” ratings, while one has given it a “hold” rating. On average, analysts have a price target of 11.80 Canadian dollars on the stock, which represents a potential upside of 27.4% from its current price of 9.26 Canadian dollars.


More From Market Realist