Is Hexo Corp (NYSE:HEXO) Stock a Good Buy Near $5?

At the beginning of the year, there was considerable interest in cannabis stocks due to overall optimism about the sector but the situation has changed somewhat in recent times.

One of the stocks that investors could look into as an example is that of the Canadian marijuana product Hexo Corp (NYSE:HEXO). Investors had expected big things from the company this year but the continued losses, flat revenues and rising debts have resulted in the stock performing poorly in recent weeks. On a year on year basis, the company’s revenues grew by only 2% in the third fiscal quarter of 2021.

The poor handling of the coronavirus pandemic in its home province of Quebec had also been a factor in the poor performance from Hexo. Quebec is the company’s biggest market and the disruptions caused by the coronavirus pandemic had a massive effect on Hexo’s poor performance.

Hence, the stunning underperformance from the company is perhaps not a big surprise for many. That being said, investors need to figure out if Hexo can rebound. Considering the fact that Quebec is going to lift its restrictions, the company’s sales figure are almost certainly going to improve. However, it is not an entirely safe stock yet considering the company’s debts.

Market Reaction:

On Tuesday, HEXO stock fell 5% at $5.28 with more than 3.96 million shares, compared to its average volume of 3.55 million shares. The stock had moved within a range of $5.27 – 5.59 after opening the trade at $5.55. Over the past 52-week, the stock has been trading within a range of $2.32 – 11.04.