If You Invested $1,000 In HEXO Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 SPY total return over the last 12 months is 33.1%. But there is no question some big-name stocks performed better than others along the way.

HEXO’s Difficult Year: One company that has been a big loser in the last year has been Canadian cannabis producer HEXO Corp HEXO.

HEXO battled a difficult Canadian cannabis market throughout 2020.

Fortunately for HEXO investors, the company was still able to generate 69.9% revenue growth in 2020 even amid the COVID-19 pandemic. In the most recent quarter, HEXO reported just 2.3% revenue growth, but the company once again reported a net loss of $20.7 million as it struggles to turn a profit.

HEXO has repeatedly been forced to raise capital by diluting investors with public offerings, and its outstanding share count has ballooned from around 60 million shares to more than 200 million shares in just two years.

At the beginning of 2020, HEXO shares were trading at around $6.60. By the beginning of March, the stock was down to $4.40 after news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.

HEXO bottomed at 35 cents during the pandemic-driven March sell-off. Fortunately for HEXO investors, the sell-off didn’t last long. By June, HEXO shares made it back up to $1.29, but the rally stalled at that point until the November U.S. presidential election.

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A victory by Democrat Joe Biden in November and a surprise blue wave giving Democrats control of both the Senate and House sent cannabis stocks soaring on optimism that U.S. cannabis legalization may be just around the corner.

After the stock fell below the $1 NYSE minimum share price requirement for listing for more than 30 days, HEXO was forced to complete a 4-for-1 reverse stock split in December 2020.

HEXO In 2021, Beyond: The stock ultimately peaked at a post-split price of $11.04 in February 2021 during a retail investor-fueled short squeeze before drifting back down to around $1.90 today. Traders may simply see a lack of progress on U.S. legalization and more lackluster growth numbers from the Canadian market as reasons to be skeptical of the stock in the near term. Or they may simply be rotating into other cannabis stocks that are executing better than HEXO.

In August, HEXO announced a transition from the NYSE to the Nasdaq, a cost-cutting move that several other cannabis stocks have made in the past year. The stock tumbled once again after HEXO announced yet another $140 million public offering on Aug. 20.

At this point, HEXO investors who bought one year ago and held on through the volatility have taken a sizable hit. In fact, $1,000 in HEXO stock bought on Sept. 14, 2020, would be worth about $611 today.

Looking ahead, analysts are expecting HEXO to get back on the right track in the next 12 months. The average price target among the 10 analysts covering the stock is $4.70, suggesting 146.9% upside from current levels.