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

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Nov. 20 2020, Updated 12:05 p.m. ET

Valuation multiple

The increase in Planet 13 Holdings (PLTH) (PLNHF) stock price since the beginning of 2019 has led to a rise in its valuation multiple. As of May 7, the company was trading at a forward EV-to-sales multiple of 1.96x compared to 1.31x at the beginning of this year. On the same day, peers MedMen Enterprises (MMNFF) (MMEN), VIVO Cannabis (VVCIF) (VIVO), and Wayland Group (MRRCF) (WAYL) were trading at forward EV-to-sales multiples of 3.20x, 2.34x, and 1.46x, respectively.

Since the beginning of this year, the stock price of MedMen has fallen by 9.6%, which has also brought its forward EV-to-sales multiple down from 3.98x. YTD, VIVO Cannabis has returned 4.2%, which has led to an increase in its EV-to-sales multiple from 1.80x to 2.34x.

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Analysts’ recommendations

Of the three analysts that follow Planet 13, one analyst was in favor of a “strong buy” rating, while the remaining two were recommending a “buy” rating. Analysts’ average 12-month price target for Planet 13 stands at 4.83 Canadian dollars, which implies an upside potential of 67.8% from its stock price of 2.88 Canadian dollars. On April 17, Canaccord Genuity raised its price target from 3.5 Canadian dollars to 4.0 Canadian dollars.

Peer comparisons

Of the total six analysts that cover MedMen Enterprises, two analysts are recommending a “strong buy,” while the remaining four analysts are in favor of a “buy” rating. Analysts have given a 12-month price target of 8.09 Canadian dollars, which represents a return potential of 136.6% from 3.48 Canadian dollars.

Of the two analysts that follow VIVO Cannabis, one analyst was in favor of a “strong buy” rating, while the other one was in favor of a “buy” rating. Analysts have given VIVO Cannabis a 12-month price target of 2.0 Canadian dollars, which represents a return potential of 170.3% from its stock price of 0.74 Canadian dollars.

Both the analysts who cover Wayland Group are favoring a “strong buy” rating for the stock. They have given a 12-month price target of 2.75 Canadian dollars for the stock, which represents a return potential of 271.6% from its stock price of 0.74 Canadian dollars.

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