While the rest of the cannabis market experienced a bit of a slowdown in the earlier periods of 2019, there were a handful of exceptions. One of these was HEXO stock, which was flying for most of the year up until May.
From the start of the year HEXO stock had risen by as much as 60%, but when the month of June came along, the wheels seemed to come off HEXO Corp (TSX:HEXO) (NYSE:HEXO) and it tumbled by 19% through the month.
The main trigger for the company’s fall from grace, as it were, is tied to its earnings report in the third quarter that was published on June 13, and since then the stock has been on a bit of a slide.
In the third quarter, the company’s revenue declined by 2.8% from the previous quarter to hit $13.02 million, and that was a particularly disappointing development since the company’s rivals had fared much better. HEXO’s other Canada-based competitors like Aurora Cannabis (TSX:ACB) (NYSE:ACB) and Canopy Growth (TSX:WEED) (NYSE:CGC) both grew their revenues from one quarter to the next.
HEXO Corp also failed to meet analyst revenue estimates.
Missing out on revenues by as much as $1.78 million, when the estimates had been $14.8 million, is not a particularly good piece of news for any company, and naturally, investors were not very happy about it.
HEXO stock is down another 2% at $5.18 on the NYSE.
Lastly, the company’s losses came in at $7.75 million, which reflected a whopping year-on-year rise of as much as 239%. The loss per share was pegged at $0.04, which actually managed to beat analyst expectations of $0.05.
That being said, one of the only positives for the company was that it had managed to boost its production capabilities by as much as 98% and had produced 9,800 kilos of cannabis in the quarter. Additionally, HEXO Corp had also gone on a hiring spree and recruited 374 more people during the quarter.
Despite the recent sell-off, HEXO stock is still up 35% so far in 2019.
Featured image: Canva