The Simple Reason Why Marijuana Stock Valuations Aren’t as Sky-High as They Seem

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Of the top three marijuana stocks in terms of market cap, only Aurora Cannabis (NASDAQOTH:ACBFF) reported positive earnings over the last 12 months. The stock’s price-to-earnings (P/E) ratio currently stands at a whopping 488. We can’t use P/E ratios to assess the valuations of Canopy Growth (NASDAQOTH:TWMJF) and GW Pharmaceuticals (NASDAQ:GWPH), but we can look at another commonly used metric — the price-to-sales (P/S) ratio. Canopy Growth’s shares trade at 86 times sales, while GW Pharmaceuticals’ P/S ratio is 220.¬† Based on these conventional valuation¬†measures, all three of these top marijuana stocks certainly appear to be way overpriced. But there’s a simple reason why marijuana stock valuations really aren’t as sky-high as they might seem. The Simple Reason Why Marijuana Stock Valuations Aren’t as Sky-High as They Seem

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