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 08/23/2024
Weekly Sector Valuation Report – All Cultivation and Retail Companies
- In cannabis, there has generally been a valuation premium placed on size. Companies with higher market caps have traditionally traded at higher EV/EBITDA multiples. This historical fact is shown clearly in our weekly valuation gap graph.
- The tendency is now reversed. The largest eight companies by market cap are trading at lower multiples than the entire sector taken as a whole.
- For example, the top 8 market cap companies are trading at a median EV/2024 EBITDA ratio of 5.97x whereas the 33 companies with analyst coverage in the sector (all sizes) are trading at a median of 6.40x.
- One explanation for this phenomenon is the fact the top companies are significantly more profitable than the group as a whole. That explains why they trade at higher revenue multiples but lower EBITDA multiples.
- Another interesting fact that jumps out of the full sector valuation is that the Market/ Tangible book value ratio median is -.01x. This indicates that over ½ of the sector’s companies now have negative tangible book value.
Week ended 08/23/2024
Weekly Sector Valuation Report – All Cultivation and Retail Companies
- In cannabis, there has generally been a valuation premium placed on size. Companies with higher market caps have traditionally traded at higher EV/EBITDA multiples. This historical fact is shown clearly in our weekly valuation gap graph.
- The tendency is now reversed. The largest eight companies by market cap are trading at lower multiples than the entire sector taken as a whole.
- For example, the top 8 market cap companies are trading at a median EV/2024 EBITDA ratio of 5.97x whereas the 33 companies with analyst coverage in the sector (all sizes) are trading at a median of 6.40x.
- One explanation for this phenomenon is the fact the top companies are significantly more profitable than the group as a whole. That explains why they trade at higher revenue multiples but lower EBITDA multiples.
- Another interesting fact that jumps out of the full sector valuation is that the Market/ Tangible book value ratio median is -.01x. This indicates that over ½ of the sector’s companies now have negative tangible book value.
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