Understanding the Price to Earnings RatioThe price to earnings ratio is negative when a company is not earning enough money to cover expenses. This is the current situation for Cannabis stocks such as Aurora, Canopy Growth, and yes, HEXO.
All of these stocks hit their historic highs in the early days of legalization while their P/E ratios were substantially worse than what they are now. It is also important to note that these companies are now making substantial increases in sales and revenue growth QTR over QTR.
EBIDTA positive is the first step for a company to turn the corner and HEXO is expecting to do so either before the end of Calendar Year 2020 or by 2nd half of it's Fiscal Year 2021. Fiscal Year 2021 began August 1st 2020.
Aurora has made no forecast as to when they will be EBIDTA positive (that I have seen) and Canopy Growth withdrew their forecast and have yet to produce another date.
Link to Additional Information on Price to Earings Ratio
https://stockanalysis.com/negative-pe-ratio/
Link to Information on what EBIDTA is
https://www.investopedia.com/terms/e/ebitda.asp
Investors trading HEXO need to be aware of the various ways the market values a stock. These measurements are partically important if you are trading high-risk, meaning you are putting in a lot of money that you are not comfortable losing, or you made a trade that exposes you to a great deal of loss if the shareprice goes up.
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