Overreaction Presents a Buying Opportunity in Hexo Stock

  • The company hit this number exactly on target and importantly cut EBITDA losses in half to C$10.3 million.
  • The huge cash burn of C$80 million was despite an improvement in the capex spending with a C$16 million dip in the sequential quarte to C$29 million.
  • Even the reduced level of capex spending still has HEXO spending nearly double on facilities as the level of net revenues of only C$17 million.
  • As an example, inventory levels ended the January quarter with a balance of C$94 million, up from C$85 million in FQ1 despite the C$16 million write down.

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