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Growgeneration (GRWG)
:GRWG
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GrowGeneration
(NASDAQ:GRWG)
Rating:47Neutral
Price Target:
$1.00
▼( -8.26% Downside)
GrowGeneration (GRWG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$64.85M
Dividend YieldN/A
Average Volume (3M)501.75K
Price to Earnings (P/E)―
Beta (1Y)2.17
Revenue Growth-18.56%
EPS Growth-4.95%
CountryUS
Employees289
SectorConsumer Cyclical
Sector Strength75
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-0.16
Shares Outstanding59,495,766
10 Day Avg. Volume346,352
30 Day Avg. Volume501,751
Financial Highlights & Ratios
PEG Ratio-0.22
Price to Book (P/B)0.51
Price to Sales (P/S)0.00
P/FCF Ratio-16.38
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue0.09
Enterprise Value/Gross Profit1.79
Enterprise Value/Ebitda-0.54
Forecast
1Y Price Target
$1.88Price Target Upside72.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
GrowGeneration Business Overview & Revenue Model
Company DescriptionGrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. It engages in the marketing and distribution of nutrients, growing media, advanced indoor and greenhouse lighting, environmental control systems, vertical benching, and accessories for hydroponic gardening, as well as other indoor and outdoor growing products. The company serves commercial and urban cultivators growing specialty crops, including organics, greens, and plant-based medicines. As of March 01, 2022, it operated a chain of 63 stores, which includes 23 in California, 8 in Colorado, 7 in Michigan, 5 in Maine, 6 in Oklahoma, 4 in Oregon, 3 in Washington, 2 in Nevada, 1 in Arizona, 1 in Rhode Island, 1 in Florida, 1 in Massachusetts, and 1 in New Mexico, as well as growgeneration.com, an online superstore for cultivators. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.
How the Company Makes MoneyGrowGeneration makes money primarily through the sale of hydroponic and organic gardening products. Its revenue model is centered around its retail stores, which are strategically located in major agricultural markets across the United States. The company generates revenue by selling a comprehensive catalog of products such as growing mediums, advanced lighting technology, hydroponic systems, nutrients, and other cultivation supplies. Additionally, GrowGeneration enhances its revenue through partnerships with leading manufacturers and vendors, ensuring a diverse and high-quality product offering. The company also benefits from the increasing legalization and expansion of the cannabis cultivation industry, which drives demand for its products and services.
GrowGeneration Key Performance Indicators (KPIs)
Any
Store Count
Shows the total number of retail locations, indicating the company's physical footprint and potential for reaching more customers and increasing sales.
Shows the total number of retail locations, indicating the company's physical footprint and potential for reaching more customers and increasing sales.
Data provided by:
Main Street Data
Main Street DataGrowGeneration Financial Statement Overview
Summary
GrowGeneration is facing significant financial challenges, as evidenced by declining revenue, profitability, and negative cash flows. The income statement indicates issues with maintaining sales and controlling costs, while the balance sheet shows manageable leverage but potential risks in asset management. Overall, the company needs strategic changes to improve financial health.Income Statement
GrowGeneration's income statement shows declining revenue and profitability over the past two years. The gross profit margin has decreased due to reduced total revenue and gross profit. The company has faced significant net losses, resulting in negative net profit margins. This trend indicates challenges in maintaining sales and controlling costs, potentially impacting long-term sustainability.45
Neutral
Balance Sheet
The balance sheet reflects a relatively stable equity position, but there is increasing pressure from liabilities. The debt-to-equity ratio remains relatively low, indicating manageable leverage. However, declining stockholders' equity and total assets suggest potential risks in asset management and capital structure stability.55
Neutral
Cash Flow
Cash flow analysis reveals negative free cash flow and operating cash flow, highlighting difficulties in generating cash from operations. The company has struggled to maintain positive cash flows, which could hinder its ability to finance operations and investments without external funding.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 188.87M | 225.88M | 278.17M | 422.49M | 193.37M | Gross Profit |
| 43.72M | 61.26M | 70.26M | 118.24M | 51.05M | EBIT |
| -51.97M | -49.84M | -38.31M | 15.00M | 8.44M | EBITDA |
| -30.30M | -29.76M | -149.48M | 27.87M | 11.03M | Net Income Common Stockholders |
| -49.51M | -46.50M | -163.75M | 12.79M | 5.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 56.45M | 64.97M | 71.91M | 81.17M | 177.91M | Total Assets |
| 174.35M | 239.09M | 293.44M | 459.34M | 354.73M | Total Debt |
| 37.03M | 42.47M | 48.84M | 45.56M | 12.72M | Net Debt |
| 9.56M | 12.71M | 8.79M | 4.19M | -165.19M | Total Liabilities |
| 54.26M | 65.69M | 77.05M | 88.05M | 37.74M | Stockholders Equity |
| 120.09M | 173.40M | 216.40M | 371.29M | 317.00M |
| Cash Flow | Free Cash Flow | |||
| -3.78M | -5.28M | -948.00K | -13.58M | -4.64M | Operating Cash Flow |
| -1.80M | 1.42M | 11.95M | 5.16M | -213.79K | Investing Cash Flow |
| 5.73M | -11.40M | -11.57M | -139.32M | -45.83M | Financing Cash Flow |
| -6.21M | -313.00K | -1.69M | -2.38M | 210.98M |
GrowGeneration Technical Analysis
Negative
1.09
Price Trends
1.07
Positive
1.23
Negative
1.60
Negative
Market Momentum
0.01
Positive
49.58
Neutral
40.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRWG, the sentiment is Negative. The current price of 1.09 is below the 20-day moving average (MA) of 1.13, above the 50-day MA of 1.07, and below the 200-day MA of 1.60, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 49.58 is Neutral, neither overbought nor oversold. The STOCH value of 40.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GRWG.
GrowGeneration Risk Analysis
GrowGeneration disclosed 39 risk factors in its most recent earnings report. GrowGeneration reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
If we fail to meet the continued listing standards of Nasdaq, our common stock may be delisted, which may adversely affect the market price and liquidity of our common stock. Q4, 2024
2.
We do not intend to pay dividends for the foreseeable future and, as a result, investor's ability to achieve a return on their investment will depend on appreciation in the price of our common stock. Q4, 2024
3.
Our growth to a certain extent is dependent on the U.S. cannabis market. In the past, California regulations caused licensing shortages and future regulations may create other limitations that decrease the demand for our products. State level regulations adopted in the future may adversely impact our business. Supply and demand and prevailing prices for cannabis may also adversely impact our business. Q4, 2024
GrowGeneration Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $6.84B | 11.23 | 3.09% | 3.95% | 2.66% | -25.23% | |
47 Neutral | $64.85M | ― | -36.21% | ― | -18.56% | -4.95% | |
47 Neutral | $66.23M | ― | -22.43% | ― | -3.10% | -381.92% | |
45 Neutral | $43.54M | ― | 8.84% | ― | -16.42% | 88.30% | |
43 Neutral | $26.09M | ― | -37.62% | ― | -8.61% | -33.30% | |
41 Neutral | $56.67M | ― | -28.34% | ― | -20.99% | -976.24% | |
38 Underperform | $49.92M | ― | -180.03% | ― | -19.83% | 22.76% |
* Consumer Cyclical Sector Average
Performance Comparison
GRWG
GrowGeneration
1.09
-1.47
-57.42%
TLYS
Tilly's
0.86
-4.90
-85.07%
VRA
Vera Bradley
2.03
-5.91
-74.43%
DLTH
Duluth Holdings
1.84
-2.27
-55.23%
ISPO
Inspirato
3.50
-0.31
-8.14%
GROV
Grove Collaborative Holdings
1.24
-0.35
-22.01%
GrowGeneration Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -11.38%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlights the company's strategic shift towards proprietary brands and digital transformation, which have positively impacted gross margins and liquidity. However, revenue decline, increased net losses, and ongoing restructuring indicate significant challenges. The outlook is cautious due to macroeconomic uncertainties and tariff issues.Q1-2025 Updates
Positive Updates
Growth in Proprietary Brand Sales
Proprietary product sales accounted for 32% of total revenue, up from 22.6% in the prior year, showcasing a significant shift towards own brands like Drip Hydro and Charcoir.
Gross Margin Improvement
Gross margins increased to 27.2%, up from 25.8% in the previous year, reflecting a stronger product mix and disciplined execution on procurement and freight.
Strong Liquidity Position
The company ended the quarter with $52.6 million in total liquidity and no debt, providing ample flexibility to fund operations and strategic initiatives.
Launch of GrowGen Pro Portal
The digital B2B platform for commercial growers is fully operational, providing features like real-time inventory and automated quoting, representing the future of GrowGen's customer engagement.
Negative Updates
Revenue Decline
First quarter net revenue was $35.7 million, down from $47.9 million in the same period last year, largely due to a reduction in retail locations and softness in demand.
Net Loss Increase
Net loss increased to $9.4 million or negative $0.16 per share, compared to a net loss of $8.8 million or negative $0.14 per share in the first quarter of 2024.
Tariff and Regulatory Concerns
Volatility due to tariff-related uncertainty affected purchasing behavior, and the company experienced margin pressure in its Storage Solutions segment.
Store Closures and Restructuring
The company is evaluating the closure of an additional ten stores as part of its transition to a more agile fulfillment-centric model.
Company Guidance
During GrowGeneration's first quarter 2025 earnings call, the company provided guidance for the second quarter, expecting revenue to exceed $40 million. However, due to uncertainty related to tariffs and macroeconomic conditions, they withdrew their full-year guidance. Despite a reported net revenue decline to $35.7 million from $47.9 million in the prior year, the company emphasized improving gross margins, which increased to 27.2%, and a focus on proprietary brands like Drip Hydro and Charcoir, which accounted for 32% of total revenue, up from 22.6% in the previous year. The call highlighted the shift towards a B2B model, digital sales through the GrowGen Pro Portal, and operational restructuring, including potential closure of ten additional stores, to enhance profitability. GrowGeneration ended the quarter with $52.6 million in liquidity and no debt, providing flexibility for operations and potential acquisitions.GrowGeneration Corporate Events
Business Operations and StrategyFinancial Disclosures
GrowGeneration Reports Q1 2025 Financial Results
Negative
May 8, 2025
On May 8, 2025, GrowGeneration Corp announced its financial results for the first quarter of 2025, revealing net sales of $35.7 million, a decline from the previous year due to the consolidation of 19 retail locations. Despite a net loss of $9.4 million, the company reported an improved gross profit margin of 27.2% and a significant increase in proprietary brand sales. The company is transitioning to a regional fulfillment center model and focusing on customer acquisition and proprietary brand penetration, while withdrawing its full-year 2025 outlook due to macroeconomic uncertainties.
Business Operations and StrategyFinancial Disclosures
GrowGeneration Reports 2024 Financial Results Amid Restructuring
Negative
Mar 13, 2025
On March 13, 2025, GrowGeneration Corp. announced its financial results for the fourth quarter and full year of 2024, highlighting a net sales decline to $188.9 million due to the consolidation of 19 retail locations and strategic restructuring. Despite a net loss of $49.5 million, the company improved its proprietary brand sales and launched a new B2B e-commerce platform, aiming for profitability and growth in 2025 with expected revenue between $170 million to $180 million.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.