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Hydrofarm Holdings Group (HYFM)
NASDAQ:HYFM
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Hydrofarm Holdings Group
(NASDAQ:HYFM)
Rating:48Neutral
Price Target:
$3.50
▲(5.74% Upside)
Hydrofarm Holdings Group (HYFM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.12M
Dividend YieldN/A
Average Volume (3M)15.59K
Price to Earnings (P/E)―
Beta (1Y)1.76
Revenue Growth-23.40%
EPS Growth13.78%
CountryUS
Employees286
SectorIndustrials
Sector Strength73
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)-0.54
Shares Outstanding4,659,020
10 Day Avg. Volume30,801
30 Day Avg. Volume15,587
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap68.09
Enterprise Value/Revenue5.97
Enterprise Value/Gross Profit48.00
Enterprise Value/Ebitda-29.87
Forecast
1Y Price Target
$3.50Price Target Upside5.74% Upside
Rating ConsensusHold
Number of Analyst Covering0
Hydrofarm Holdings Group Business Overview & Revenue Model
Company DescriptionHydrofarm Holdings Group (HYFM) is a leading distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture, including indoor and urban gardening. The company offers a comprehensive range of products such as lighting solutions, climate control systems, growing media, and plant nutrients, catering to both commercial and hobbyist growers. Hydrofarm operates primarily in the United States and Canada, serving the burgeoning market for innovative agricultural solutions that enhance crop yield and quality.
How the Company Makes MoneyHydrofarm Holdings Group generates revenue through the sale of hydroponics equipment and supplies. The company's primary revenue streams include the distribution of proprietary and third-party branded products to a wide network of retailers, commercial growers, and other end-users. Hydrofarm collaborates with a variety of vendors and manufacturers to offer a diverse product portfolio, ensuring a steady supply chain and product availability. Additionally, the company benefits from strategic partnerships and acquisitions that expand its product offerings and market reach. Factors such as increasing interest in sustainable agriculture and the growing legal cannabis market have significantly contributed to Hydrofarm's earnings by driving demand for its products.
Hydrofarm Holdings Group Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable achievements in SG&A savings, restructuring plans, and international sales growth. However, these were offset by significant declines in net sales and gross profit margins, as well as challenges in the durable products segment and tariff impacts.Q2-2025 Updates
Positive Updates
SG&A Savings and Positive Free Cash Flow
Delivered the 12th consecutive quarter of year-over-year adjusted SG&A savings with a nearly 16% reduction in expenses compared to 2024, resulting in positive free cash flow for the quarter.
Restructuring Plan for Improved Profitability
Initiated a new restructuring plan to focus on higher-margin brands and optimize distribution and manufacturing, expecting annual cost savings in excess of $3 million.
International Sales Growth
International sales improved year-on-year with notable results in select European and Asian countries, driving diversification of revenue streams.
Consumables Outperform Durables
Consumable products outperformed durable products, with the consumables mix increasing to approximately 80% of sales in the second quarter.
Negative Updates
Significant Decline in Net Sales
Net sales for the second quarter were $39.2 million, down 28.4% year-over-year, driven by a 27.9% decline in volume mix and a 0.4% decline in pricing.
Gross Profit Margin Decline
Gross profit in the second quarter was $2.8 million or 7.1% of net sales, compared to $10.9 million or 19.8% of net sales in the year ago period.
Durable Products Underperformance
Continued industry headwinds and lower performance in durable lighting and equipment products led to a decline in the second quarter.
Tariff Challenges
Incremental costs of approximately $300,000 year-to-date due to tariffs, with ongoing uncertainty impacting the durables business.
Company Guidance
During the Hydrofarm Holdings Group's Second Quarter 2025 Earnings Conference Call, several key metrics were highlighted to provide guidance on the company's performance and strategic initiatives. The company achieved a 16% reduction in adjusted SG&A expenses, marking the 12th consecutive quarter of year-over-year savings in this area. Despite industry headwinds, including a 28.4% year-over-year decline in net sales to $39.2 million and a 27.9% decrease in volume mix, the company managed to deliver positive free cash flow of $1.4 million for the quarter. Adjusted gross profit stood at $7.5 million, or 19.2% of net sales, although negatively impacted by restructuring charges. Hydrofarm initiated a restructuring plan to optimize its product portfolio, targeting annual cost savings exceeding $3 million, primarily through reducing inventory and SKUs. The company remains focused on improving its proprietary brand mix, which accounted for 55% of sales in the first quarter, despite a softer mix in the second quarter due to challenging demand in the durables category. The company also noted a $300,000 impact from tariffs and is actively managing its sourcing strategies to mitigate future effects. With cash on hand at $11 million and total liquidity of $20 million as of June 30, 2025, Hydrofarm is well-positioned to navigate the current market challenges while remaining optimistic about future industry demand improvements.Hydrofarm Holdings Group Financial Statement Overview
Summary
Hydrofarm Holdings Group is facing financial difficulties with declining revenues and profitability. The income statement shows significant challenges with negative growth and margins. The balance sheet is stable but indicates rising leverage, while cash flow analysis reveals cash management issues despite some improvement in free cash flow.Income Statement
Hydrofarm Holdings Group's income statement reflects significant challenges. The company has experienced declining revenue with a negative growth rate of -8.8% TTM, and profitability metrics are concerning with a negative net profit margin of -38.4% and EBIT margin of -29.4% TTM. The gross profit margin has also decreased over time. These figures indicate operational inefficiencies and a need for cost management improvements.45
Neutral
Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio of 0.84 TTM, which is relatively stable but has increased over the years, indicating rising leverage. The return on equity is negative, reflecting ongoing losses. However, the equity ratio remains healthy, suggesting that the company still maintains a solid equity base relative to its assets.55
Neutral
Cash Flow
Cash flow analysis reveals some improvement in free cash flow growth at 19.7% TTM, but operating cash flow remains negative, indicating cash management issues. The free cash flow to net income ratio is relatively high, suggesting that despite losses, the company is managing to generate some cash flow relative to its net income.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 161.10M | 190.29M | 226.58M | 344.50M | 479.42M | 342.20M |
| Gross Profit | 20.03M | 32.13M | 23.92M | 29.34M | 101.49M | 63.63M |
| EBITDA | -32.18M | -19.92M | -17.51M | -229.62M | 17.01M | 13.69M |
| Net Income | -61.91M | -66.72M | -64.81M | -285.42M | 13.42M | -7.27M |
Balance Sheet | ||||||
| Total Assets | 389.88M | 426.10M | 507.64M | 573.56M | 891.24M | 275.80M |
| Cash, Cash Equivalents and Short-Term Investments | 10.99M | 26.11M | 30.31M | 21.29M | 26.61M | 75.18M |
| Total Debt | 164.04M | 169.53M | 183.93M | 186.07M | 167.57M | 20.06M |
| Total Liabilities | 194.87M | 202.38M | 217.03M | 223.68M | 256.06M | 64.88M |
| Stockholders Equity | 195.01M | 223.72M | 290.61M | 349.88M | 635.18M | 210.92M |
Cash Flow | ||||||
| Free Cash Flow | -10.32M | -3.22M | 2.83M | 13.76M | -50.47M | -46.33M |
| Operating Cash Flow | -11.86M | -324.00K | 7.04M | 21.99M | -45.07M | -44.83M |
| Investing Cash Flow | -1.11M | 1.67M | -4.17M | -8.49M | -468.18M | 546.00K |
| Financing Cash Flow | -6.32M | -4.78M | 6.07M | -20.20M | 464.71M | 88.14M |
Hydrofarm Holdings Group Technical Analysis
Negative
3.31
Price Trends
4.21
Negative
3.76
Negative
4.51
Negative
Market Momentum
-0.13
Positive
30.69
Neutral
30.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HYFM, the sentiment is Negative. The current price of 3.31 is below the 20-day moving average (MA) of 4.35, below the 50-day MA of 4.21, and below the 200-day MA of 4.51, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 30.69 is Neutral, neither overbought nor oversold. The STOCH value of 30.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HYFM.
Hydrofarm Holdings Group Risk Analysis
Hydrofarm Holdings Group disclosed 68 risk factors in its most recent earnings report. Hydrofarm Holdings Group 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 0 New Risks
Hydrofarm Holdings Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $16.86M | 10.56 | 14.17% | ― | -14.22% | ― | |
64 Neutral | $10.73B | 15.74 | 7.60% | 2.01% | 2.75% | -15.09% | |
48 Neutral | $14.12M | ― | -27.51% | ― | -23.40% | 13.78% | |
38 Underperform | $6.48M | ― | -146.60% | ― | -20.80% | 3.49% | |
37 Underperform | $17.25M | ― | -33.60% | ― | 33.28% | 16.12% |
* Industrials Sector Average
Performance Comparison
HYFM
Hydrofarm Holdings Group
3.31
-3.09
-48.28%
ARTW
Art's-Way Manufacturing Co
3.21
1.28
66.32%
BNC
CEA Industries
20.50
13.99
214.90%
UGRO
urban-gro
0.49
-0.98
-66.67%
Hydrofarm Holdings Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Hydrofarm Holdings Reports Q2 2025 Financial Results
Negative
Aug 12, 2025
On August 12, 2025, Hydrofarm Holdings Group announced its financial results for the second quarter ending June 30, 2025, revealing a significant decrease in net sales and gross profit compared to the previous year, primarily due to industry oversupply and a decline in proprietary brand sales mix. Despite these challenges, the company reported positive free cash flow and initiated a restructuring plan to optimize its product portfolio and operational footprint, aiming for over $3 million in annual cost savings. The company remains focused on strategic priorities to drive high-quality revenue streams, improve profitability, and strengthen its financial position.
Executive/Board ChangesBusiness Operations and Strategy
Hydrofarm Holdings Appoints New Board Member, Amends Charter
Neutral
Jun 13, 2025
On June 9, 2025, Hydrofarm Holdings Group, Inc. appointed B. John Lindeman to its board of directors, filling the vacancy left by Richard D. Moss. Concurrently, the company made amendments to its charter, retiring and eliminating references to 7,725,045 shares of Series A Preferred Stock, which were converted into common stock, and reducing the authorized shares of Series A Preferred Stock.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.