HEXO stock continues to move lower on Tuesday after HEXO Corp (TSX:HEXO) (NYSE:HEXO) reported high losses for the fourth quarter.
The cannabis industry has been in a frenzied state for many months now, and most of the companies in the sector have seen their stock prices slide considerably. The same has happened with HEXO stock, and today, the stock slid again after the company announced its financial results for the fourth quarter. The losses deepened year-on-year, and soon enough, the stock came under pressure.
In the fiscal fourth quarter, HEXO Corp recorded $56.7 million CAD in net losses, which translated to losses to the tune of 28 cents a share. In the prior-year period, the losses had come to $10.5 million CAD, and the losses per share had been limited to 5 cents. That being said, Bill Kirk, an analyst at MKM, stated that the issues with the company aren’t structural, and it should be able to meet its targets for 2020—a sentiment that is no doubt a relief to shareholders.
HEXO stock fell by as much as 7% to $2.16 as investors started to dump shares. There had been hope that the company would be able to control its losses in the quarter, but this doesn't seem to have come to fruition.
Analysts are Bearish
It has not been a great few days for HEXO stock, in general. The stock slid by as much as 14% last week after the company announced on Thursday that there were going to be as many as 200 job cuts at HEXO Corp. CIBC downgraded the stock, stating that the move from HEXO is an indication that the Quebec-based cannabis company could be facing a set of fresh challenges.
Previously, CIBC analysts had set a target price of $4.00 CAD for the stock, but after the company's announcement on Thursday, they cut the target price to $3.00 CAD. However, it should be noted that HEXO is among the bigger companies in the industry, so it remains to be seen how it will navigate these murky waters over the next few months.
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