RE:PS-Ratio Price Targettingover $200 bucks a share at 244 PS ratio...?
quinlash wrote: To compare similar companies within a sector based on their sales figures you can use the PS-Ratio calculations. You can also look at a companies progress to profitability, it's cash position vs. debts and repayment schedules etc.
The PS-Ratio approach will provide you a rough estimate as to where the stock should be trading at if it were trading at the same PS-Ratio as others. Personally I like to use Canopy Growth as the comparison stock as both HEXO and Canopy have extremely similar business models, partners and product lines and both are considered Canadian Licensed Producers. No where in the PS-Ratio is there a place where time lines are calculated so be sure to still trade with a timeline when you think a PS-Ratio will adjust upward.
The historic high PS-Ratio on HEXO is 244 and that is back in 2018 when the company was pulling in little to no sales numbers. I would highly suggest using more recent PS-Ratio data, at least until we get a definate timeline on US Legalization, or progress on the SAFE Banking Act.
HEXO - Price to Sales Ratio Data
https://ycharts.com/companies/HEXO.TO/ps_ratio
Investopedia Link on How to use PS-Ratio
https://www.investopedia.com/articles/fundamental/03/032603.asp
If you do the math and you still think $14 was the highest the SP can go... well.. you may want to double check your math.
GLTA
Q