Quagmire of Sales NumbersFrom what I see, the current Price to Earnings (P/E) ratio based on last quarter’s results of $7.7m is sitting at 19xEarnings. IF we retain this P/E ratio moving forward, and we show $10mm sales for Q3 – This translate to a $2.60 stock price. I’ll take a 40c jump from QtoQ on organic growth in the earnings. Anything Beyond this would be crazy awesome. Just trying to keep it real here ;)
The Average Price to Earnings Ratio in the top 15 #CanadianPotStocks is 24x
P/E ratio of some of the top dogs in the industry?
$WEED – 66xP/E
$ACB – 60xP/E
$APHA – 34xP/E
$HEXO – 38xP/E
SO, here’s what this means for a company like WEED – At a $21.9bn Market Cap, and a P/E Average of 24x – They Need to bring in $900mm in sales yearly. That’s a 300% increase in sales needed YoY as of last quarter just to justify its CURRENT stock price!.
Same scenario for $FIRE – P/E Average of 24x – With a $10mm sales this quarter (Q3). = $3.29 SP
None of this is anything more than speculative math and no one should be basing their investments on this type of criteria alone, but seeing these numbers laid out beside each other, shows just how crazy this market is, and how out of focus the investment community has taken it. I understand there is a certain amount of speculation of "future income" included to most stocks, but $fire has seen none of that action in its Stock Price. Lot 16, Cambium, Malta, and Oils, deserves to get some forward looking love out of its SP...
Anyway that’s all the rambling I’ll do on the subject. Hope everyone has a good weekend.
Wishing all the mom's a Happy Mother's Day tomorrow xo!