Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Hexo Momentum Slows As Q3 Results Are A Big Miss

By Investing.com (Brenda O'Farrell/Investing.com)Stock MarketsJun 22, 2021 05:55AM ET
www.investing.com/analysis/hexo-momentum-slows-as-q3-results-are-a-big-miss-200587492
Hexo Momentum Slows As Q3 Results Are A Big Miss
By Investing.com (Brenda O'Farrell/Investing.com)   |  Jun 22, 2021 05:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Shares of Hexo Corp (NYSE:HEXO) (TSX:HEXO) have zigzagged their way steadily downward in the last few days since the cannabis grower unveiled its latest quarterly results.

HEXO Weekly TTM
HEXO Weekly TTM

The stock closed Monday at US$5.76, down about 18.5% from where it was trading at the beginning of last week.

The Canadian-based marijuana company posted third-quarter revenues of C$22.6 million (US$18.26 million), a figure that was 29% below the previous three-month period and a disappointing 35% under analysts’ expectations. Analysts had predicted that Hexo would report C$34.5 million (US$27.87 million) in revenue.

The results miss has had the affect of a spoke being shoved into Hexo’s wheel, as it was gaining momentum in the competitive cannabis market with a series of deals. The Ottawa-based company had earlier this year announced deals that totalled about C$1.3 billion (US$1.05 billion) to take over three cannabis firms—Zenabis Global (OTC:ZBISF) (TSX:ZENA), 48North Cannabis Corp (OTC:NCNNF) (TSXV:NRTH) and Redecan Pharm.

These headline-grabbing deals set the tone for Hexo’s push to expand and propel the company to become one of the leading Canadian cannabis growers with an international reach.

But as a Stifel analyst reportedly said in a note last week, according to a report by BNN Bloomberg, Hexo’s poor third-quarter will shift its momentum somewhat.

Said analyst Andrew Carter:

“While Hexo’s aggressive merger and acquisition activity had the potential to shift focus from any disruption in the company’s momentum particularly in a quarter where results were challenged across the sector, the magnitude of the underperformance drives scrutiny for the core business as well as the ability to realize value from the three acquisitions.”

Two of Hexo’s three deals, however, have not closed yet. And they are not expected to be completed until later this year as they await regulatory approval.

Cronos Buys Stake In PharmaCann

Cronos Group (NASDAQ:CRON) (TSX:CRON) last week announced it was buying a 10.5% stake in PharmaCann, one of the largest privately-held cannabis companies in the United States.

The deal, valued at US$110.4 million, will go into effect as soon as cannabis is legalized federally in the US. The move, according to Cronos president and CEO Kurt Schmidt, is part of the company’s US-focused growth strategy.

PharmaCann operates in six states and has 23 dispensaries and six cultivation and production facilities.

CRON Weekly TTM
CRON Weekly TTM

Shares of Cronos Group closed yesterday at US$8.56, up about 2.5% on the day.

Connecticut is set to become the eighteenth US state to legalize cannabis.

The state’s senate voted to approve the move, which will allow the sale of recreational cannabis. Weed will only be formally legal once the governor signs the bill, a hurdle that it is expected to pose little obstacle.

According to published reports, sales of marijuana in the state are expected to reach US$750 million by 2025. Long-awaited federal legalization legislation could be introduced as early as next month, according to a tweet from one pot firm executive.

In a tweet late last week, Curaleaf (OTC:CURLF) executive chairman Boris Jordan said that Senate Majority Leader Chuck Schumer, along with two additional Senate Democrats will be introducing holistic cannabis legislation in July.

Hexo Momentum Slows As Q3 Results Are A Big Miss
 

Related Articles

Hexo Momentum Slows As Q3 Results Are A Big Miss

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Dom Min
CienteMago Jul 13, 2021 9:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Personally I feel that Hexo having bought Redecan is going to setup Hexo for gains in the near future.
Jarvin Hermann
Jarvin Hermann Jun 22, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Cedric Ward
Cedric Ward Jun 22, 2021 6:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Brenda, your dope asf😭💪🏿💯
Cedric Ward
Cedric Ward Jun 22, 2021 6:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
you're*
Luqman Firdaus
Luqman Firdaus Jun 22, 2021 5:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
ok love
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email