How Cronos Group and Aurora’s Valuations Compare with Peers

Cronos Group

Cronos Group (CRON) saw a big spike in its forward EV-to-EBITDA valuation multiple compared to its historical average as shown in the chart below. The company was trading at a multiple of 106.8x, which was much higher than its historical average of 16.8x and the peer median at 18.5x as of May 22.

How Cronos Group and Aurora’s Valuations Compare with Peers

What caused the spike?

Cronos Group stock fell after it reported its earnings on May 9. The stock lost about 1%, while the ETFMG Alternative Harvest ETF (MJ) lost about 3.2% over the same period. The company’s spike in valuation multiple was driven primarily by a downward movement in forward EBITDA estimates in the current month, which overshadowed the declining trend in the stock month-over-month.

Aurora Cannabis (ACB) also experienced an increase in its valuation multiple to 74.6x, which was trading higher than its historical average of 34.4x. Similar to Cronos Group, Aurora Cannabis’s increase in multiple was also dominated by a downward movement in forward EBITDA estimates. Read Aurora Cannabis: Analysts’ Ratings and Target Price.

Also, OrganiGram (OGRMF) was trading at a multiple of 17.8x, and Aphria (APHA) was trading at 8.5x, which were both lower than the peers’ median of 18.5x as of May 22.