Price to Sales vs. Price to Earnings Everyone saying this stock is overvalued is off basis here. For mature companies it is more suitable to look at Price to Earnings ratios of course because growth is minimal (5%-10%). However, when examining companies that experience extremely high growth and focusing on exapnsion it is always more suitable to look at Price to Sales. Just look at AMZN. They have a ridiculous P/E ratio yet investoirs are still piling in. This is because they are in an intense world domination type of growth phase and for now do not care about the bottom line.
Assuming 100 Million in Revenue for Canopy for the trailing 12 months (maybe not yet but before 2018 this will be the case if not more), this would give WEED a P/S ratio of 14. That is extremely fair.
Basically, when deciding whether to invest in WEED or not do not base yourself on the price tag because that, in my opinion, is justified. Instead you must base yourself on the probability that you give to legislation going through. The risk being if it gets vetoed or delayed before the end of Trudeau's term and the next PM not supporting it through. I give this a 5%-10% possibility. I'm happy investing my money with a 90% possibilty of success.
GL!