HEXO stock is trending up at present. Shares hit a year-to-date low of $3.99 at the end of July and thankfully found support. Since then, they have remained on an upward swing, currently selling for $4.94 USD.
HEXO Corp (TSX:HEXO) (NYSE:HEXO) grows, produces, and distributes medicinal marijuana. It is based in Quebec, Canada, where it holds a 30% market share of that province. Earlier in the year, HEXO stock made the leap to the NYSE.
A Tale of Two Halves for HEXO Stock
The company’s year-to-date story is a tale of two halves. Prior to May, it seemed HEXO Corp could do no wrong. From January straight through to the end of April, shares climbed all the way to $8.28, packing on 115% as they went. Spurred on by operational announcements from head office, HEXO stock was also the recipient of unending positive analyst reporting.
However, the subsequent three months undid all that hard work and cast a very big question mark over cannabis’s shining prince.
The fact is that the cannabis industry is in a consolidation stage, and the long-term picture is going to look incredibly different than what it is now. Many of the biggest names will not survive. Is HEXO going to be one that doesn’t survive?
Arguably, there is a case for the bears. HEXO Corp has lost a lot of money, and it will likely continue to do so in the short-term. As InvestorPlace explains:
“In 2017 the annual loss was almost $12.5 million. The $23.5 million loss reported in 2018 was almost twice as much. Analysts predict this year’s losses will be similar.”
HEXO stock is facing challenges this year and will likely face a lot more over the next few. With a focus mainly in the Canadian market, there are also concerns about missing out on the much larger US market.
But on the flip side, investors have a lucrative Molson Coors (NYSE:TAP) deal to look forward to. This brings HEXO Corp into the cannabis beverage and derivatives territory. And further, despite the losses, HEXO stock still remains in the green 28% year-to-date, and we are currently in an upward trend once again. Perhaps the last few months of the year will echo the first?
What are your thoughts on HEXO stock? Has the summer’s poor performance made you question this cannabis play?
Featured Image: Canva