- Canopy Growth trades at C$16B market cap and 40x EV/Sales despite reporting only C$135M revenue and negative C$86M EBITDA last quarter.
- The company has no near-term path to break-even EBITDA and has already burned through $3.5B of the $5.0B cash from Constellation.
- The stock has always traded at a large premium, along with Cronos, due to their corporate backers and large cash pile.
- Given the huge disparity between its fundamentals and valuation, we find it difficult to value Canopy, thus we prefer Aphria (cheaper) and leading U.S. MSOs (growth and cheaper).
For further details see:
Canopy Growth: Time To Cede The Crown