Sundial Growers Inc. (NASDAQ:SNDL) a company that is engaged in production and marketing of cannabis products for the adult-use market in Canada, has been witnessing a slide in its stock. The company has earlier also done a massive burn to its investors. So, taking this into consideration, is Sundial stock still a buy for the investors. Would it help its investors to overcome its previous burns?
Given the fact that the cannabis market is expectedly much larger in the U.S. compared to Canada, the federal legalization of cannabis would result in large gains by Sundial stock. However, this may take years to get legalized. Despite this, if one looks at the battle between “meme stock” Sundial clearly stands as a big winner and none contest close to it.But one cannot overlook the fact that as the months progressed the shares fell.
However, they remained overvalued, particularly after the company sold a high number of its shares thereby making it much less expensive than it was before.While Sundial’s price-to-sales (P/S) multiple is steep, it’s still lower than several other Canadian marijuana stocks. The stock’s enterprise value/sales (EV/Sales) ratio is 11 times based on analysts’ average 2021 sales estimates.
At today’s prices, however, the stock is still trading at a premium valuation. Thus, despite the fact that the company still faces significant challenges to turn its cannabis business around, it could prove itself to be a game-changer.
On Monday, SNDL stock gained 2.61% at $0.82 with more than 96.63 million shares, compared to its average volume of 188.24 million shares. The stock has moved within a range of $0.7900 – 0.8199 after opening the trade at $0.7970. Over the past 52-week, the stock has been trading within a range of $0.1380 – 3.9600.
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