OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
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Valuation Tracker By Industry Sector
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.
Week ended 05/30/2025
Sector Valuation – Biotech/Pharma Sector
- Only 29 of the 38 Biotech/Pharma companies in the Viridian Value Tracker database have material LTM revenues, making revenue and EBITDA multiples difficult to utilize. Focusing narrowly on the seven analyst companies with annualized revenues exceeding $10 million, we find a median annualized revenue multiple of 2.26x, which seems reasonable to us.
- Market-to-book ratios for the sector are widely distributed, with a median of 0.29x, a third quartile of 3.12x, and a first quartile of -1.36x.
- The moral here is that this is a sector that is dangerous to value based on easily calculated financial ratios. It requires more sophisticated valuation methods and a deeper understanding of drug pipelines and clinical trials.
Week ended 05/30/2025
Sector Valuation – Biotech/Pharma Sector
- Only 29 of the 38 Biotech/Pharma companies in the Viridian Value Tracker database have material LTM revenues, making revenue and EBITDA multiples difficult to utilize. Focusing narrowly on the seven analyst companies with annualized revenues exceeding $10 million, we find a median annualized revenue multiple of 2.26x, which seems reasonable to us.
- Market-to-book ratios for the sector are widely distributed, with a median of 0.29x, a third quartile of 3.12x, and a first quartile of -1.36x.
- The moral here is that this is a sector that is dangerous to value based on easily calculated financial ratios. It requires more sophisticated valuation methods and a deeper understanding of drug pipelines and clinical trials.
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