Overvalued? Really? Let's get one thing clear, P/E ratios are not for growth stage companies. Any company in a growth sector that is PROFITABLE, is not scaling appropriately, and would actually worry me. A company that is leveraging all of their fiscal resources to grow, is a company that will scale.
Overvalued...there are many other stocks other than Cannabis that are "overvalued". if you are looking for textbook technical ratios, go look into mining and financial services, emerging tech/cannabis/growth sectors are not for you.
Amazon trading at a 4.5 price to sales ratio...
Aurora with 220m this Q, lets say 1B a year revenue. This gives it a 4.5B valuation this year, fair value based on emerging tech multiples (which are more risky than MJ, given mj is a retail product, and a commodity good that is a raw input into other products as well)
The edible market, drink market, and medicinal derivatives have not even been priced into this 4.5 B valuation. We are trading about 3 times this year's revenue.
Anyone sensible will know that unlike Amazon, we are not competing to create a market, we are competing to realize it. It will be much easier to sell edibles and drinks with mj than it is to dirsupt the traditional grocery shopping business. triple the growth over the next few years is not unreasonable.
So...for the traders, do what you have to do. They are here to trade on volatility. THey are not here to value invest.
Longs...it may be a while before the market matures...but 3-4 years down the road we'll definitely see some additional hype based on the pace of growth. Exciting times ahead...this industry is not crashing for long.