Cannabis Chart Of The Week: How Much Have MSO Valuation Multiples Changed In The Last Year And Why?
Portfolio Pulse from Viridian Capital Advisors
Cannabis industry valuations and multiples for major MSOs have increased Y/O/Y, driven by rescheduling prospects. The EV/NTM EBITDA multiples for 14 MSOs showed an aggregate 39% increase, with notable exceptions like Jushi, TerrAscend, and Ascend experiencing declines. Factors influencing these changes include variations in enterprise value and EBITDA estimates, with a general trend towards valuing EBITDA at higher multiples despite a decrease in EBITDA estimates for some. Companies like Cresco and Ascend, showing modest valuation multiples but increased EBITDA expectations, may warrant further investigation.
April 18, 2024 | 4:19 pm
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NEGATIVE IMPACT
Jushi's valuation multiple decreased by 35.5%, indicating a potential negative short-term impact on its stock price.
The significant decrease in Jushi's valuation multiple suggests a negative market perception or underperformance relative to peers, likely impacting investor sentiment and stock price negatively in the short term.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
TerrAscend's valuation multiple decreased by 5.2%, potentially indicating a slight negative short-term impact on its stock price.
A modest decrease in TerrAscend's valuation multiple may reflect minor concerns or underperformance, possibly leading to a slight negative impact on its stock price in the short term.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Ascend's valuation multiple slightly decreased by 0.2%, indicating a neutral to slightly negative short-term impact on its stock price.
The negligible decrease in Ascend's valuation multiple suggests a stable market perception with minimal impact on its stock price in the short term.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
Vext experienced a 70% multiple expansion despite a decline in EV and EBITDA, indicating a mixed short-term impact on its stock price.
Vext's significant multiple expansion, despite declining EV and EBITDA, suggests investor optimism may counterbalance the negative aspects, leading to a neutral short-term impact on stock price.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Cresco's valuation multiple rose by 3%, potentially indicating a positive short-term impact on its stock price, especially given increased EBITDA expectations.
The increase in Cresco's valuation multiple, coupled with higher EBITDA expectations, suggests a positive market outlook and potential for short-term stock price appreciation.
CONFIDENCE 85
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
Curaleaf's valuation multiple increased by 70%, indicating a strong positive short-term impact on its stock price despite nearly flat EBITDA.
The substantial increase in Curaleaf's valuation multiple, even with flat EBITDA, reflects strong investor confidence and market perception, likely leading to significant short-term stock price appreciation.
CONFIDENCE 95
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
GTI showed both increased EBITDA multiples and EBITDA estimates, indicating a positive short-term impact on its stock price.
GTI's increase in both valuation multiples and EBITDA estimates suggests a strong market position and growth prospects, likely leading to positive short-term stock price movement.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 85