TSX:HEXO

Stock Analysis Report

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Executive Summary

HEXO Corp., through its subsidiaries, produces, markets, and sells cannabis in Canada. More Details


Snowflake Analysis

High growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has HEXO's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HEXO is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 14% a week.

Volatility Over Time: HEXO's weekly volatility has decreased from 20% to 14% over the past year.


Market Performance


7 Day Return

31.4%

HEXO

6.5%

CA Pharmaceuticals

-0.002%

CA Market


1 Year Return

-51.7%

HEXO

18.9%

CA Pharmaceuticals

0.7%

CA Market

Return vs Industry: HEXO underperformed the Canadian Pharmaceuticals industry which returned 28.2% over the past year.

Return vs Market: HEXO underperformed the Canadian Market which returned -0.8% over the past year.


Shareholder returns

HEXOIndustryMarket
7 Day31.4%6.5%-0.002%
30 Day70.4%34.1%11.9%
90 Day51.6%41.8%5.7%
1 Year-51.7%-51.7%18.9%18.9%4.4%0.7%
3 Year-56.9%-56.9%-32.8%-33.9%12.7%1.7%
5 Yearn/a284.4%280.8%53.8%30.2%

Long-Term Price Volatility Vs. Market

How volatile is HEXO's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is HEXO undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HEXO (CA$1.38) is trading below our estimate of fair value (CA$2.86)

Significantly Below Fair Value: HEXO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HEXO is unprofitable, so we can't compare its PE Ratio to the CA Pharmaceuticals industry average.

PE vs Market: HEXO is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate HEXO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: HEXO is good value based on its PB Ratio (1.2x) compared to the CA Pharmaceuticals industry average (1.6x).


Next Steps

Future Growth

How is HEXO forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

128.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HEXO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: HEXO is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: HEXO's is expected to become profitable in the next 3 years.

Revenue vs Market: HEXO's revenue (29.2% per year) is forecast to grow faster than the Canadian market (6.2% per year).

High Growth Revenue: HEXO's revenue (29.2% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HEXO is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has HEXO performed over the past 5 years?

-87.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HEXO is currently unprofitable.

Growing Profit Margin: HEXO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: HEXO is unprofitable, and losses have increased over the past 5 years at a rate of 87.4% per year.

Accelerating Growth: Unable to compare HEXO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: HEXO is unprofitable, making it difficult to compare its past year earnings growth to the Pharmaceuticals industry (-45%).


Return on Equity

High ROE: HEXO has a negative Return on Equity (-98.17%), as it is currently unprofitable.


Next Steps

Financial Health

How is HEXO's financial position?


Financial Position Analysis

Short Term Liabilities: HEXO's short term assets (CA$305.7M) exceed its short term liabilities (CA$82.5M).

Long Term Liabilities: HEXO's short term assets (CA$305.7M) exceed its long term liabilities (CA$53.7M).


Debt to Equity History and Analysis

Debt Level: HEXO's debt to equity ratio (10.6%) is considered satisfactory.

Reducing Debt: HEXO's debt to equity ratio has reduced from 45.7% to 10.6% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: HEXO has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if HEXO has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is HEXO current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate HEXO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate HEXO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if HEXO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if HEXO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HEXO's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Sebastien St-Louis (36 yo)

7.25yrs

Tenure

CA$8,849,943

Compensation

Mr. Sebastien G. St-Louis is the Co-Founder of HEXO Corp. (formerly known as The Hydropothecary Corporation) and has been its Chief Executive Officer, President and Director since August 13, 2013. Mr. St-L...


CEO Compensation Analysis

Compensation vs Market: Sebastien's total compensation ($USD6.83M) is above average for companies of similar size in the Canadian market ($USD853.56K).

Compensation vs Earnings: Sebastien's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Sebastien St-Louis
Co-Founder7.25yrsCA$8.85m1.31%
CA$ 9.1m
Roch Vaillancourt
General Counsel2.67yrsCA$1.20m0%
CA$ 0
Dominique Jones
Chief People Officer2.17yrsCA$1.27mno data
Michael Monahan
Consultant1.08yrsCA$509.09kno data
Adam Miron
Co-Founder & Director7.25yrsCA$538.91k0.47%
CA$ 3.2m
Trent MacDonald
Chief Financial Officer0.083yrno datano data
Donald Courtney
Chief Operating Officer1.5yrsno datano data
Jennifer Smith
Manager of Financial Reporting & Investor Relationsno datano datano data
Max Cyr
Director of Customer Experience & Complianceno datano datano data
Isabelle Robillard
Vice President of Communication1.83yrsno datano data
Sonia Isabel
Vice-President of Sales2.67yrsno datano data
James McMillan
Chief Development Officer0.83yrCA$407.09k0%
CA$ 0

1.8yrs

Average Tenure

48yo

Average Age

Experienced Management: HEXO's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Sebastien St-Louis
Co-Founder7.25yrsCA$8.85m1.31%
CA$ 9.1m
Adam Miron
Co-Founder & Director7.25yrsCA$538.91k0.47%
CA$ 3.2m
Michael Munzar
Independent Chairman of the Boardno dataCA$600.75k0.48%
CA$ 3.3m
Jason Ewart
Independent Director6yrsCA$534.55kno data
Emilio Imbriglio
Independent Director0.083yrno datano data
Vincent Chiara
Independent Director4yrsCA$562.69k2.99%
CA$ 20.7m

6.0yrs

Average Tenure

47yo

Average Age

Experienced Board: HEXO's board of directors are considered experienced (6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 96.7%.


Top Shareholders

Company Information

HEXO Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: HEXO Corp.
  • Ticker: HEXO
  • Exchange: TSX
  • Founded:
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: CA$691.327m
  • Shares outstanding: 483.45m
  • Website: https://www.hexocorp.com

Number of Employees


Location

  • HEXO Corp.
  • 3000 Solandt Road
  • Kanata
  • Ontario
  • K2K 2X2
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HEXOTSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 2017
HEXONYSE (New York Stock Exchange)YesCommon SharesUSUSDMar 2017
74HDB (Deutsche Boerse AG)YesCommon SharesDEEURMar 2017

Biography

HEXO Corp., through its subsidiaries, produces, markets, and sells cannabis in Canada. It offers dried cannabis under the Time of Day and H2 lines; Elixir, a cannabis oil sublingual mist product line; and ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/02 00:14
End of Day Share Price2020/12/01 00:00
Earnings2020/07/31
Annual Earnings2020/07/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.