DB:74H

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Mediocre balance sheet and slightly overvalued.


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: 74H's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.6%

74H

2.0%

DE Pharmaceuticals

2.6%

DE Market


1 Year Return

-85.6%

74H

7.0%

DE Pharmaceuticals

8.1%

DE Market

Return vs Industry: 74H underperformed the German Pharmaceuticals industry which returned 7% over the past year.

Return vs Market: 74H underperformed the German Market which returned 8.1% over the past year.


Shareholder returns

74HIndustryMarket
7 Day-2.6%2.0%2.6%
30 Day-7.4%-5.4%0.7%
90 Day34.9%1.1%11.5%
1 Year-85.6%-85.6%10.2%7.0%10.5%8.1%
3 Yearn/a29.0%14.2%6.4%-2.1%
5 Yearn/a21.2%0.4%15.2%-0.3%

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

No news available

Valuation

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

7.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 74H (€0.58) is trading below our estimate of fair value (€0.63)

Significantly Below Fair Value: 74H is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 74H is unprofitable, so we can't compare its PE Ratio to the XE Pharmaceuticals industry average.

PE vs Market: 74H is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 74H's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 74H is good value based on its PB Ratio (0.6x) compared to the DE Pharmaceuticals industry average (3.3x).


Next Steps

Future Growth

How is HEXO forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

66.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 74H is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: 74H is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: 74H is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: 74H's revenue (38.8% per year) is forecast to grow faster than the German market (5.8% per year).

High Growth Revenue: 74H's revenue (38.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 74H is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has HEXO performed over the past 5 years?

-90.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 74H is currently unprofitable.

Growing Profit Margin: 74H is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 74H is unprofitable, and losses have increased over the past 5 years at a rate of 90.7% per year.

Accelerating Growth: Unable to compare 74H's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 74H is unprofitable, making it difficult to compare its past year earnings growth to the Pharmaceuticals industry (11.2%).


Return on Equity

High ROE: 74H has a negative Return on Equity (-76.58%), as it is currently unprofitable.


Next Steps

Financial Health

How is HEXO's financial position?


Financial Position Analysis

Short Term Liabilities: 74H's short term assets (CA$259.5M) exceed its short term liabilities (CA$44.6M).

Long Term Liabilities: 74H's short term assets (CA$259.5M) exceed its long term liabilities (CA$101.5M).


Debt to Equity History and Analysis

Debt Level: 74H's debt to equity ratio (14.4%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if 74H's debt to equity ratio has reduced 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: 74H has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if 74H 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 74H's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate 74H'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 74H's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 74H'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 74H's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Sébastien St-Louis (36 yo)

7yrs

Tenure

CA$8,849,943

Compensation

Mr. Sébastien 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: Sébastien's total compensation ($USD6.62M) is above average for companies of similar size in the German market ($USD995.99K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Sébastien St-Louis
Co-Founder7yrsCA$8.85m1.37%
CA$ 3.7m
Stephen Burwash
Chief Financial Officer0.83yrCA$3.03mno data
Roch Vaillancourt
General Counsel2.42yrsCA$1.20mno data
Dominique Jones
Chief People Officer1.92yrsCA$1.27mno data
Michael Monahan
Consultant0.83yrCA$509.09kno data
Donald Courtney
Chief Operating Officer1.25yrsno 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 Communication1.58yrsno datano data
Sonia Isabel
Vice-President of Sales2.42yrsno datano data
James McMillan
Chief Development Officerno dataCA$407.09kno data
Taras Korec
Senior Vice President of Procurementno datano datano data

1.8yrs

Average Tenure

50yo

Average Age

Experienced Management: 74H's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Sébastien St-Louis
Co-Founder7yrsCA$8.85m1.37%
CA$ 3.7m
Michael Munzar
Independent Chairman of the Boardno dataCA$600.75k0.50%
CA$ 1.3m
Jason Ewart
Independent Director5.75yrsCA$534.55kno data
Vincent Chiara
Independent Director3.75yrsCA$562.69k3.11%
CA$ 8.4m
Adam Miron
Co-Founder & Director7yrsCA$538.91k0.49%
CA$ 1.3m

6.4yrs

Average Tenure

47yo

Average Age

Experienced Board: 74H's board of directors are considered experienced (6.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: 74H insiders have sold more shares than they have bought 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 120.3%.


Top Shareholders

Company Information

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


Key Information

  • Name: HEXO Corp.
  • Ticker: 74H
  • Exchange: DB
  • Founded:
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: CA$426.550m
  • Listing Market Cap: CA$270.583m
  • Shares outstanding: 463.64m
  • Website: https://www.hexocorp.com

Number of Employees


Location

  • HEXO Corp.
  • 490 Boulevard Saint-Joseph
  • Suite 204
  • Gatineau
  • Quebec
  • J8Y 3Y7
  • 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 Analysis2020/08/09 20:53
End of Day Share Price2020/08/07 00:00
Earnings2020/04/30
Annual Earnings2019/07/31


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.