Cannabis company Hexo Corp (NASDAQ:HEXO) saw its stock take a dive yesterday by as much as 4% and hit $1.41 a share. In this regard, it should be noted that the stock suffered the decline one day after having reported a lower than expected loss in the fourth quarter that had ended on July 31, 2021.
Trading Data
On Monday, HEXO stock decreased 4.08% at $1.4100 with more than 14.25 million shares, compared to its average volume of 7.89 million shares. The stock has moved within a range of $1.3400 – 1.4600 after opening the trade at $1.4600.
Earnings Recap
In this situation, it is perhaps time for investors to figure out if the decline in the stock could in fact prove to be an opportunity or not. John Zamparo, who is an analyst at CIBC Capital Markets, does not seem to think so. Yesterday, he changed the rating of the Hexo stock to neutral from outperform.
In this regard, it should be noted that the company is all set to becoming profitable due to the 20% EBITDA margin that is going to be generated thanks to the acquisition of Redecan.
Redecan was acquired by Hexo in a deal worth $925 million in September this year. However, at the same time, it is necessary to keep in mind that the company is currently staring at a bit of a cash crunch owing to the payments that it would need to make in relation to its $360 million senior convertible notes offering.
Technical Data
HEXO stock is trading below the 20-Day and 50-Day Moving averages of $1.72 and $1.98 respectively. Moreover, the stock is trading below the 200-Day moving average of $5.06. The stock is down 60% so far this year.
