HEXO Equities Warrants Exp 2 Apr 2024 T.HEXO.W.A

RE:HEXO with a PS-Ratio of 20

[mydogchach]

quinlash - (5/25/2021 4:15:46 PM)
HEXO with a PS-Ratio of 20

This shouldn't be hard for anyone who cares to take a few minutes to do the math.
Canopy is trading around a PS-Ratio of 20, if you run the CURRENT trailing 4 QTR sales numbers for HEXO with a shareprice of $26... does that happen to work out to the same PS-Ratio of Canopy Growth ?
$ 18.14

What does the SP look like when you add in Zenabis Sales and add on the Zenabis Shares after they have converted over to HEXO at a .01772 Zenabis to HEXO conversion ratio.
What does the SP of HEXO need to be for the PS-Ratio to be 30 ?   Canopy has traded over 50 in 2021 and HEXO has a historical high of 244.
$ 27.21


SEE ANSWERS BELOW:

A higher PS Ratio does not translate to a higher share price - the above is nonsense. You simply don't understand the PS Ratio

For those that haven't done that - this is the actual PS Ratio equation:
P-S Ratio = Current Share Price divided by
                     Sales per Share
Sales per share is determined by previous 12 months sales divided by number of o/s shares.

Using rough numbers for Hexo, the actual, current PS Ratio calculation is:
                                    
Current Share price        $7.48     
Sales per Share                 .91    ($111 million sales / 122.4 million shares)
    PS Ratio:       8.21

If Hexo was to have a PS Ratiio of 20, they would need a share price of $19.00.
Current Share Price         $18.14
Sales per Share                    .91
     PS Ratio:      20.0

If Hexo was to have a PS Ratiio of 30, they would need a share price of $19.00.
Current Share Price         $27.21
Sales per Share                    .91
     PS Ratio:      30.0
 
Canopy's current calculation is:
Current Share price        $29.15    
Sales per Share                  1.34    ($506 million sales / 377.0 million shares)
    PS Ratio:       21.75

And that is the reason you need to compare companies share prices to those have roughly the same number of shares issued and annual sales.
If the calc is based in part on annual sales and o/s shares - you need to compare companies that are roughly the same

For fun - here are some popular names mentioned on the board actual current share prices and PS Ratios: (calculated prior to todays share price changes)
               
Share Price                       PS Ratio
Hexo        $  7.03                     7.7
ACB             9.16                     4.8
Village        10.47                     3.8
Canopy       27.71                   20.6
Zena              .12                     1.8
48North          .15                     1.9
Delta 9           .51                     1.0
Sundial           .76                   29.8
Cronos          8.93                   54.1
Tilray          18.36                   33.0
OGI              3.29                   13.6

The lower the PS Ratio number - the more fairly valued the share price. Anything higher than a 10 is  a red flag. 
Again - we all know that most cannabis companies remain over valued

Sundial and Cronos are good examples of over valued companies, as is Canopy.

Delta 9 (a pretty solid little company if you want to take a look) is probably under valued. personally I think they're a perfect takeover target