This equates to a very small $343.8M Market Cap "We believe PYX has between 500 and 1,600% upside potential."
Canopy Growth Corp. [TSX: WEED] is trading at 10.7x 2020 sales of $1.05 billion
Cronos Group [TSX: CRON] is trading at 12.3x 2020 sales of $160m
Aurora Cannabis (OTCQX:ACBFF) [TSX: ACB] is trading at 8.6x 2021 sales of $1.1 billion.
Aphria (OTCQB:APHQF) [TSX: APH] is trading at 9.4x 2021 sales of $360m
Tilray is trading at 43.8x 2020 sales of $350m
Now, let's compare that to Pyxus, which is trading at 0.8x fiscal 2018 sales of approximately $1.8 billion. It simply doesn't make sense that Pyxus would trade at such a big discount to the group because it not only has two Canadian cannabis licenses with its FIGR East and FIGR North operations, but also has an emerging industrial hemp/CBD business, a growth e-liquids business and let's not forget a legacy ~ $175m EBITDA tobacco leaf business selling in over 90 countries and a farmer base of over 300,000.
Our first valuation exercise looked at PYX from the top-down using the pie chart provided by management at their investor day. That analysis indicated a valuation range of $315-$431 per share. Next, we looked at a bottoms-up analysis of each segment of Pyxus's business. After rolling-up the individual parts, the analysis indicates the following:
The results from the bottoms-up analysis elicit a lower overall range of values at $154-$358 per share, but we think we can agree these values remain much, much higher than today's current PYX's price of $28.18 per share leaving a substantial margin of safety.