Revisiting valuations

On June 7, we discussed the forward EV-to-Sales for Aurora Cannabis (ACB). At that time, the company was trading at a forward multiple of 14.5x, while the peer median was at 6.3x. This figure means that the market was paying 14.5x for each unit of sales for the next 12-month period. Let’s revisit how the stock is doing now in terms of valuations.

Revisiting Aurora Cannabis’s Valuations at End of June

Forward multiple

As of June 21, Aurora Cannabis was trading at 13.9x, which was about 3.7% lower than our previous update. Over this period, the peer median was also trading lower at 5.8x, which was almost 9.5% lower than our previous update. Thus, Aurora Cannabis has been pretty resilient compared to its peer median, which includes the 12 cannabis companies mentioned in the above chart. Also, Aurora Cannabis continued to trade at a premium to its peer, which can be taken as an indication that the stock had relatively better prospects over players on average within the industry over the next 12 months.

Other stocks that were also trading at a premium to the peer median were Cronos Group (CRON) and Innovative Industrial Properties (IIPR). Both these stocks were trading at 26x and 19x, respectively. In contrast, OrganiGram (OGI) was trading at a forward multiple of 5.8x, which was right at the peer median.

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