Supreme - still severely undervalued
Recent upgrade to Aphria by analysts - and a deep dive article got me thinking.
cronos/canopy trade 18-21X CY21 EV/Sales - (see note at end)
If the top 5 LPs garner that - whats the next 5 LP's get as supreme is top 9/10 LP in rec market.
Well OGI is the weakest link - Has an EV about 535mil and CY21 ~89mil gives them 6X Today.
FIRE - At 6x CY21E(62mil net rev) = 372mil - ~71mil debt = 301 Market Cap.
Implies fire should be trading at .60cents today.
** the convertible debt converts to shares at .45 (At fires discretion) which removes 35.7mil debt from the calculation and increases the Outstanding shares. ultimately it works out to .54 cents/share.
Thats TODAYS value if we have the same metrics as OGI.
With an ebita positive/cash positive quarter - we should easily justify this value. If we clear 14mil - we would be on pace to surpass 62mil CY21E and possibly thus higher value.
Cantor Fitzgerald analyst Pablo Zuanic increased his 12-month price target on Aphria to C$26, from C$15.25. He says the Aphria x Tilray merger has a 70% upside. The primary reason that Cantor has upgraded Aphria is due to the large disconnect in valuations between Aphria and Canopy Growth/Cronos. Both Cronos and Canopy Growth trade between an 18-21x CY21 EV/sales multiple while Aphria x Tilray trade at a 13x multiple despite the combined entity holding a 20%/#1 market share position in Canada.