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

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Valuation multiple

The surge in Planet 13 Holdings’ (PLTH) (PLNHF) stock price since the beginning of 2019 has led to an increase in its valuation multiple. As of May 28, the company was trading at a forward EV-to-sales multiple of 2.93x compared to 1.31x at the beginning of this year. In comparison, peers MedMen Enterprises (MMNFF) (MMEN), VIVO Cannabis (VVCIF) (VIVO), and the Green Organic Dutchman Holdings (TGOD) (TGODF) were trading at forward EV-to-sales multiples of 2.84x, 2.26x, and 5.68x, respectively.

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Analysts’ estimates

For 2019, analysts expect Planet 13 to post revenue of $74.2 million, which represents growth of 250.5% from $21.2 million in 2018. Also, analysts are expecting the company to become profitable in 2019. They are expecting the company to report net profits of $5.7 million in 2019 compared to a loss of $10.7 million in 2018.

Analysts’ recommendations

Of the three analysts that are following Planet 13, one analyst is favoring a “strong buy” recommendation, while the other two are favoring “buy” recommendations. On average, analysts have given Planet 13, a 12-month price target of 4.83 Canadian dollars, which implies a return potential of 74.5% from its stock price of 2.77 Canadian dollars.

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Peer comparisons

Of the total six analysts covering MedMen Enterprises, two analysts have given a “strong buy” rating, while the remaining four analysts have given a “buy” rating. On average, analysts’ 12-month price target for MedMen stands at 8.09 Canadian dollars, which represents a return potential of 152.9% from its stock price of 3.20 Canadian dollars.

Of the total five analysts covering Acreage Holdings, two analysts are in favor of a “strong buy” rating, while three analysts are recommending a “buy” rating. On average, analysts have given Acreage a 12-month price target of $34.0, which represents a return potential of 77.1% from its stock price of $19.20.

Of the eight analysts that follow Curaleaf, three analysts are favoring a “strong buy” rating, while five analysts are in favor of a “buy” rating. On average, analysts have given Curaleaf a 12-month price target of 17.46 Canadian dollars, which represents a return potential of 35.5% from its stock price of 12.89 Canadian dollars.

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