Weekly Valuation Tracker
Viridian highlights a specific industry sector and provides a deep dive into valuation metrics and comparable company valuations for public companies operating in that sector. The Weekly Valuation Tracker provides proprietary, actionable valuation data.
Weekly Valuation Report – EBITDA Margins vs EBITDA / Assets- Which should we be focused on?
- The graph below shows nine significant U.S. MSOs’ EBITDA margins in blue and EBITDA/ Assets in orange.
- We generally do not hear anyone commenting on EBITDA / Assets. Still, arguably, this is a more significant ratio than the EBITDA margin because it tells us how much return the company is making on the assets it has had to accumulate or finance. Take Ascend Wellness (AAWH: CSE), for example. It has the second lowest EBITDA margin of the group, but it produces more sales per dollar of assets than any other company on the chart. Its profitability in terms of EBITDA to Assets is, accordingly, the third-best in the group.
- All other things being equal, we tend to like higher EBITDA/ Assets as it measures not only raw margins but asset productivity. Perhaps this measure should get more attention.
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Valuation Tracker By Sector
The Viridian Value Tracker is the most comprehensive valuation product in the industry.
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- A broad set of 12 valuation measures assures applicability, regardless of whether the company has analyst coverage or revenues. The typically presented EV/ Projected Revenues and EV/ Projected EBITDA are available for less than 1/3 of the cannabis companies we track.
- Most valuation studies present only the average valuation measures, while the Tracker goes one step further and shows the distribution of values (the quartiles, median, and dispersion) for each measure. This gives users a more complete view of how companies in the cohort group are valued.
Sector Valuation – Cultivation & Retail- the world against the U.S.
- It is striking to look at the overall valuation metrics of the Cultivation & Retail sector because it shows how discounted U.S. companies are.
- The worldwide sector has 29 companies with 2025 EBITDA estimates, and the median EV/2025 EBITDA is 6.49x. The U.S. has 19 companies with 2025 EBITDA estimates, and the median EV/EBITDA value is only 4.11x.
- This gap is not entirely unwarranted. The two key drivers of the discount are that 1) due to 280e less of each $1 of U.S. EBITDA becomes free cash flow, and 2) the U.S. companies trade on junior exchanges with significantly less volume, thereby attracting significantly less institutional investment. We can bemoan these differences, but they are real.
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Sector Valuation – Cultivation & Retail- the world against the U.S.
- It is striking to look at the overall valuation metrics of the Cultivation & Retail sector because it shows how discounted U.S. companies are.
- The worldwide sector has 29 companies with 2025 EBITDA estimates, and the median EV/2025 EBITDA is 6.49x. The U.S. has 19 companies with 2025 EBITDA estimates, and the median EV/EBITDA value is only 4.11x.
- This gap is not entirely unwarranted. The two key drivers of the discount are that 1) due to 280e less of each $1 of U.S. EBITDA becomes free cash flow, and 2) the U.S. companies trade on junior exchanges with significantly less volume, thereby attracting significantly less institutional investment. We can bemoan these differences, but they are real.
