It's been a great morning session for AppHarvest investors, who saw their shares rise 13.0% to a price of $0.65 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
AppHarvest, Inc., an applied agricultural technology company, develops and operates indoor farms to grow non-GMO produce free of chemical pesticide residues. The company belongs to the Consumer Defensive sector, which has an average price to earnings (P/E) ratio of 24.21 and an average price to book (P/B) ratio of 4.09. In contrast, AppHarvest has a trailing 12 month P/E ratio of -0.4 and a P/B ratio of 0.2.
P/B ratios are calculated by dividing the company's market value by its book value. The book value refers to all of the company's tangible assets minus its liabilities -- meaning that intangibles such as intellectual property, brand name, and good will are not taken into account. Traditionally, a P/B ratio of around 1 shows that a company is fairly valued, but owing to consistently higher valuations in the modern era, investors generally compare against sector averages.
AppHarvest has moved -86.3% over the last year compared to -19.7% for the S&P 500 — a difference of -66.7%. AppHarvest has a 52 week high of $7.05 and a 52 week low of $0.47.
