Hexo (HEXO, $1.06) beats revenue estimates

Hexo reported its latest quarterly revenue that beat analysts’ expectations.

The cannabis company’s revenue for the quarter ended April 30 came in at $16.3 million, compared to the $14.9 million that Zacks Investment Research had predicted. The result also surpassed FactSet’s  estimate of just under $15 million.

The company’s revenue got a major boost from sales of the "Original Stash" brand.

Overall, adult-use cannabis revenue climbed to $22.07 million, up from a little over $17 million in the previous quarter and $10.8 million in the year-ago quarter.

Hexo’s gross margins increased by 40%.  

HEXO in -15.13% Downtrend, sliding for three consecutive days on June 10, 2020

As a Bearish sign, keep an eye on this company's ticker for future decline. Considering data from situations where HEXO declined for three days, in 175 of 203 cases, the price rose further within the following month. The odds of a continued Downtrend are 86%.

Current price $1.06 crossed the support line at $1.11 and is trading between $1.11 support and $0.69 resistance lines. Throughout the month of 05/08/20 - 06/10/20, the price experienced a +106% Uptrend. During the week of 06/03/20 - 06/10/20, the stock enjoyed a +46% Uptrend growth.

Technical Analysis (Indicators)

Bearish Trend Analysis

The RSI Indicator appears to be shifting from an Uptrend to a Downtrend. In 21 of 27 cases where HEXO's RSI indicator exited the overbought zone, the price fell further within the following month. The odds of a continued Downtrend are 78%.

The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

The higher Bollinger Band was broken -- a price fall is expected as the ticker heads toward the middle band, which invites the trader to consider selling or shorting the ticker, or exploring put options. In 25 of 31 cases where HEXO's price broke its higher Bollinger Band, its price dropped further during the following month. The odds of a continued Downtrend are 81%.

Bullish Trend Analysis

The Momentum Indicator exceeded the 0 level on June 03, 2020. Traders may consider buying the ticker or exploring call options. In 44 of 52 cases where the ticker's Momentum Indicator exceeded 0, its price rose further within the subsequent month. The odds of a continued Uptrend are 85%.

The price moved above its 50-day Moving Average, which indicates a change from a Downtrend to an Uptrend. In 15 of 18 similar backtested cases where HEXO's price crossed above its 50-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 83%.

The 10-day Moving Average for this ticker crossed above its 50-day Moving Average on May 28, 2020, which can be construed as a buy signal, indicating that the trend is shifting higher. In 6 of 6 similar cases where HEXO's 10-day Moving Average crossed above its 50-day Moving Average, the price rose further within the following month. The odds of a continued Uptrend are 90%.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 73%. During the last month, the daily ratio of advancing to declining volumes was 2.2 to 1.

The Tickeron PE Growth Rating for this company is 100 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. HEXO’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 91, placing this stock worse than average.

The Tickeron Valuation Rating of 78 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.73) is normal, around the industry mean (1.09). P/E Ratio (0.00) is within average values for comparable stocks, (32.70). Projected Growth (PEG Ratio) (0.00) is also within normal values, averaging (115.92). Dividend Yield (0.00) settles around the average of (1.05) among similar stocks. P/S Ratio (7.30) is also within normal values, averaging (10.90).

The Tickeron Price Growth Rating for this company is 39 (best 1 - 100 worst), indicating steady price growth. HEXO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.