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A Closer Look at HEXO’s Valuation

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Updated

HEXO

HEXO (HEXO) has emerged as one of the cannabis sector’s best performers this year, returning ~123%. In April, one of the stock’s strongest months this year, it has risen 19%.

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Peer comparison

HEXO’s (HEXO) forward EV[1.enterprise value]-to-sales multiple of 6.4x is on par with peers’ median and slightly above its historical average of 5.8x. In contrast, Innovative Industrial Properties’ (IIPR) 18.4x is much higher than its historical average of 10.4x and peers’ (HMLSF) median of 6.4x.

CannTrust’s (CTST) median, on the other hand, is 3.8x, below its historical average of 6.1x and peers’ median. CannTrust’s disappointing earnings results led to its valuation correcting. Green Thumb Industries’ (GTBIF), KushCo’s (KSHB), and Supreme Cannabis’s (SPRWF) multiples are also lower than peers’ median, at 1.95x, 1.92x, and 4.0x, respectively.

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