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Scotts Miracle-Gro Company (SMG)
NYSE:SMG
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Scotts Miracle-Gro Company
(NYSE:SMG)
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Select Model
Rating:52Neutral
Price Target:
$63.00
▲(1.06% Upside)
The score is held back primarily by weak financial performance and balance-sheet risk (negative equity and high leverage), despite improving cash generation. Support comes from constructive technical momentum and a generally positive earnings-call outlook with reiterated guidance, improving leverage/interest expense, and a disciplined plan for future buybacks, but the elevated P/E limits the valuation component.
Positive Factors
Brand Strength & Retail Distribution
Scotts' entrenched consumer brands and strategic retailer relationships (Home Depot, Walmart, online) provide durable demand pull, channel reach, and shelf placement that support steady revenue generation and resilience across economic cycles and seasonal swings.
Improving Cash Generation
Consistent FCF growth strengthens the company’s ability to pay down debt, fund capital investment and execute the disciplined $500M repurchase plan once leverage targets are met. Management’s $275M FCF target underpins durable deleveraging and optionality.
Margin Expansion & Efficiency
Gross margin improvement from pricing, supply‑chain optimization and planned automation indicates sustainable margin upside. If sustained, these structural cost and productivity gains support long‑term EBITDA expansion and higher cash conversion.
Negative Factors
Weak Balance Sheet / Negative Equity
Negative equity and a highly leveraged capital structure raise solvency and refinancing sensitivity, limiting strategic flexibility. This structural weakness increases risk around funding M&A, capex, and buybacks until leverage and equity position materially improve.
Declining Revenue Trend
Persistent top‑line contraction weakens scale economics and puts pressure on margins and fixed‑cost absorption. Reversing this trend requires sustained execution on innovation, e‑commerce expansion and household penetration over multiple seasons.
Execution Risk & Elevated Investment Needs
The ambitious 2030 targets depend on successful rollout of product innovation, e‑commerce scale, tuck‑in M&A, plant automation and channel pilots. High ongoing CapEx (~$130M) and prior impairments (Hawthorne $105M) make execution and timing risk a structural concern.
Scotts Miracle-Gro Company (SMG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.73B
Dividend Yield4.52%
Average Volume (3M)746.99K
Price to Earnings (P/E)43.4
Beta (1Y)0.66
Revenue Growth-3.93%
EPS GrowthN/A
CountryUS
Employees5,300
SectorBasic Materials
Sector Strength58
IndustryAgricultural Inputs
Share Statistics
EPS (TTM)-0.77
Shares Outstanding58,007,150
10 Day Avg. Volume1,021,361
30 Day Avg. Volume746,989
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)-9.18
Price to Sales (P/S)0.96
P/FCF Ratio11.98
Enterprise Value/Market Cap1.68
Enterprise Value/Revenue1.83
Enterprise Value/Gross Profit5.98
Enterprise Value/Ebitda14.67
Forecast
1Y Price Target
$66.73Price Target Upside7.04% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Scotts Miracle-Gro Company Business Overview & Revenue Model
Company DescriptionThe Scotts Miracle-Gro Company engages in the manufacture, marketing, and sale of products for lawn, garden care, and indoor and hydroponic gardening in the United States and internationally. The company operates through three segments: U.S. Consumer, Hawthorne, and Other. It provides lawn care products comprising lawn fertilizers, grass seed products, spreaders, other durable products, and outdoor cleaners, as well as lawn-related weed, pest, and disease control products; gardening and landscape products include water-soluble and continuous-release plant foods, potting mixes and garden soils, mulch and decorative groundcover products, plant-related pest and disease control products, organic garden products, and lives goods and seeding solutions. The company also offers hydroponic products that help users to grow plants, flowers, and vegetables using little or no soil; lighting systems and components for use in hydroponic and indoor gardening applications; insect, rodent, and weed control products for home areas; and non-selective weed killer products. It sells its products under the Scotts, Turf Builder, EZ Seed, PatchMaster, Thick'R Lawn, GrubEx, EdgeGuard, Handy Green II, Miracle-Gro, LiquaFeed, Osmocote, Shake 'N Feed, Hyponex, Earthgro, SuperSoil, Fafard, Nature Scapes, Ortho, Miracle-Gro Performance Organics, Miracle-Gro Organic Choice, Whitney Farms, EcoScraps, Mother Earth, Botanicare, Hydroponics, Vermicrop, Gavita, Agrolux, Can-Filters, Sun System, Gro Pro, Hurricane, AeroGarden, Titan, Tomcat, Ortho Weed B Gon, Roundup, Groundclear, and Alchemist brands. The company serves home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, e-commerce platforms, and food and drug stores, as well as indoor gardening and hydroponic distributors, retailers, and growers. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.
How the Company Makes MoneyScotts Miracle-Gro generates revenue through the sale of its extensive product portfolio, which is primarily categorized into two segments: the Consumer segment and the Professional segment. The Consumer segment includes products sold directly to consumers through retail outlets and online platforms, while the Professional segment focuses on providing products to commercial users, such as landscapers and agricultural businesses. Key revenue streams include sales of fertilizers, soil, grass seed, and pest control products. The company benefits from strong brand recognition and loyalty, particularly with its flagship Miracle-Gro products. Additionally, Scotts Miracle-Gro engages in strategic partnerships with major retailers like Home Depot and Walmart, enhancing its distribution capabilities and market reach. Seasonal demand fluctuations, particularly in spring and summer, also significantly impact the company's earnings, with peak sales occurring during these months as consumers engage in gardening and lawn care activities.
Scotts Miracle-Gro Company Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much each business unit contributes to total revenue, offering insights into diversification and which segments drive growth.
Shows how much each business unit contributes to total revenue, offering insights into diversification and which segments drive growth.
Data provided by:
The Fly
The FlyScotts Miracle-Gro Company Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call emphasized multiple clear operational and financial improvements (gross margin expansion, reduced interest expense, stronger free cash flow, improved leverage, e-commerce growth, and a new disciplined $500M share repurchase program) and laid out an ambitious long-term growth target through 2030. There are notable near-term negatives — a $105M Hawthorne impairment, ongoing first-quarter losses, seasonality/timing risks, and elevated CapEx — but management presented a coherent plan to address leverage, focus the portfolio, and invest behind high-margin branded growth. On balance, the positive operational trends, cash generation, investor-friendly capital actions, and clear long-term strategy outweigh the lowlights.Q1-2026 Updates
Positive Updates
Share Repurchase Program and Capital Allocation
Board approved a multi-year $500 million share repurchase program beginning in late 2026, targeted long-term share count of ~40 million shares; repurchases to be disciplined and tied to leverage targets (will begin once leverage is comfortably below 4x) and funded by free cash flow.
Hawthorne Divestiture and Strategic Focus
Hawthorne classified as discontinued operation with pending sale to Vireo Growth; divestiture is intended to refocus Scotts on lawn & garden and provided an immediate ~40 basis point improvement to gross margin on a full-year basis; Scotts will hold a minority equity investment in Vireo and continue commercial arrangements.
Top-Line and POS Performance (Selected Categories)
Q1 total company net sales (ex-Hawthorne) were $354.4 million; U.S. consumer sales $328.5 million (ahead of expectations due to earlier seasonal load-in). Q1 POS was slightly down ~1% in dollars and units vs prior year, but FY2025 POS (recast, branded-focused) was up 2%. Category bright spots: indoor gardening POS +7.7% dollars / +9% units; Roundup POS +24% dollars / +27% units.
E-commerce Momentum
Branded e-commerce POS dollars grew +12% and units +17% in Q1; e-commerce comprised 14% of overall branded POS (up 150 basis points YoY). Company sees e-commerce as a major future growth driver and notes margin delta vs brick-and-mortar is shrinking (less than ~5 percentage points).
Gross Margin and Cost Efficiency Gains
GAAP gross margin for Q1 was 25.0%, up 90 basis points YoY; non-GAAP adjusted gross margin was 25.4% vs 24.5% a year ago (+90 bps). Management cited ongoing supply chain optimization, pricing actions, and planned investments (automation, plant upgrades) supporting further margin improvement toward guidance.
Improved Leverage, Interest Expense and Free Cash Flow
Net debt to adjusted EBITDA decreased to 4.03x from 4.52x a year ago (down ~0.49 turn). Interest expense fell 20% YoY to $27.2 million. Free cash flow was favorable by $78 million in Q1. Company reiterated fiscal 2026 free cash flow target of $275 million to further reduce leverage to the high threes.
Profitability Trajectory and Near-Term Guidance
Non-GAAP adjusted EBITDA came in $3 million ahead of expectations in Q1. Q1 GAAP net loss from continuing operations improved to $47.8 million ($0.83/sh) from $66.1 million ($1.15/sh) prior year; non-GAAP adjusted loss improved to $44.6 million ($0.77/sh) from $50.2 million ($0.88/sh). Fiscal 2026 guidance includes low single-digit U.S. consumer sales growth, non-GAAP adjusted gross margin of at least 32%, non-GAAP adjusted EPS $4.15–$4.35, mid-single-digit EBITDA growth, and $275M free cash flow.
Strategic Growth Plan to 2030
Management announced long-term targets to add ~$1 billion in top-line sales and ~$1 billion in EBITDA by ~2030, driven by a ~5% annual top-line growth algorithm (innovation, pricing, volume, e-commerce, margin-accretive tuck-in M&A) and a greater focus on branded, high-margin products.
Negative Updates
Hawthorne Impairment Charge
Recorded a pretax asset impairment charge of $105 million within loss from discontinued operations representing excess of carrying value over estimated selling price for Hawthorne; prior results will be recast and Hawthorne removal reduces 2025 adjusted EBITDA by ~ $11 million.
Q1 POS and Seasonal Variability
Q1 POS (branded, expanded reporting) was slightly down ~1% in both dollars and units versus a very strong prior-year Q1; company noted lingering timing/load-in variability and weather-driven seasonality that can shift shipments between quarters.
Continuing First-Quarter Loss
Company still reported a GAAP net loss from continuing operations of $47.8 million ($0.83/sh) and a non-GAAP adjusted loss of $44.6 million ($0.77/sh) in Q1, although both improved vs prior year; first fiscal quarter historically produces losses.
Leverage Still Above Long-Term Target
Leverage improved to 4.03x net debt / adjusted EBITDA but remains above management’s stated 'sweet spot' leverage target of 3.0–3.5x; reduction to target levels depends on continued free cash flow generation and execution.
Significant Investments and Elevated CapEx
Management expects elevated capital expenditures (CapEx) to support automation, plant upgrades, and ERP/tech transformation (CapEx expected around $130 million in 2027 and beyond). These investments are necessary for margin expansion but keep near-term cash deployed in the business.
Execution Risk & Reliance on Multiple Initiatives
Long-term ~$1B sales / $1B EBITDA target depends on successful execution across many fronts (innovation, e-commerce expansion, household penetration, margin improvement, and margin-accretive tuck-in M&A); management acknowledged work remains to capture remaining supply chain savings (~$50M referenced) and to scale initiatives like 'do it for me' and pro channel pilots.
Company Guidance
The company reiterated fiscal 2026 guidance calling for U.S. consumer net sales growth in the low single digits, a non‑GAAP adjusted gross margin rate of at least 32%, non‑GAAP adjusted earnings from continuing operations of $4.15–$4.35 per share, non‑GAAP adjusted EBITDA growth in the mid‑single digits, and $275 million of free cash flow with leverage coming down to the “high threes”; management said its sweet spot is 3.0–3.5x net debt/EBITDA and plans a measured $500 million multi‑year share repurchase program beginning in late 2026 (targeting ~40 million shares over time) once leverage is comfortably below 4x. For context, Q1 (ex‑Hawthorne) net sales were $354.4 million (U.S. consumer $328.5 million, ~10% of the year), GAAP gross margin was 25.0% (non‑GAAP 25.4%), Q1 non‑GAAP adjusted loss was $0.77 per share, interest expense was $27.2 million (down 20%), net debt/adjusted EBITDA fell to 4.03x (from 4.52x), free cash flow was favorably impacted by $78 million in the quarter, Hawthorne’s classification as discontinued improved gross margin by ~40 bps but triggered a $105 million pretax impairment, e‑commerce branded POS was up 12% (units +17%) and represented 14% of branded POS (up 150 bps), and the company is investing incremental $30 million this year (total $130 million) in supply chain plus $25 million in brand/media.Scotts Miracle-Gro Company Financial Statement Overview
Summary
Overall fundamentals are pressured: revenue declined (-7.96%) and profitability remains challenged despite some margin improvement. Cash flow is a relative bright spot (free cash flow growth +11.98%), but the balance sheet is a major risk with negative equity and very high leverage signals.Income Statement
The income statement reveals a challenging financial period for Scotts Miracle-Gro Company. Revenue has been declining, with a negative growth rate of -7.96% in the most recent year. Profitability metrics such as gross profit margin (31.19%) and net profit margin (4.25%) show some improvement compared to previous years, but overall margins remain under pressure. The EBIT and EBITDA margins have improved but are still below industry standards, indicating operational challenges.45
Neutral
Balance Sheet
The balance sheet shows significant financial leverage, with a negative stockholders' equity and a high debt-to-equity ratio of -5.89. This indicates potential solvency issues and financial instability. The return on equity is negative, reflecting the company's struggle to generate returns for shareholders. The equity ratio is also negative, highlighting a concerning capital structure.30
Negative
Cash Flow
Cash flow analysis shows some positive trends, with a free cash flow growth rate of 11.98% and a free cash flow to net income ratio of 0.74, indicating efficient cash generation relative to net income. However, the operating cash flow to net income ratio of 0.50 suggests that cash flow from operations is not fully covering net income, which could be a risk if profitability does not improve.55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.41B | 3.41B | 3.55B | 3.55B | 3.92B | 4.92B |
| Gross Profit | 1.04B | 1.04B | 850.50M | 657.30M | 872.90M | 1.47B |
| EBITDA | 425.60M | 425.50M | 215.80M | -182.70M | -334.80M | 849.80M |
| Net Income | 145.30M | 145.20M | -34.90M | -380.10M | -437.50M | 512.50M |
Balance Sheet | ||||||
| Total Assets | 2.74B | 2.74B | 2.87B | 3.41B | 4.30B | 4.80B |
| Cash, Cash Equivalents and Short-Term Investments | 36.60M | 36.60M | 71.60M | 31.90M | 86.80M | 244.10M |
| Total Debt | 2.11B | 2.11B | 2.52B | 2.91B | 3.27B | 2.60B |
| Total Liabilities | 3.10B | 3.10B | 3.26B | 3.68B | 4.15B | 3.79B |
| Stockholders Equity | -357.50M | -357.50M | -390.60M | -267.30M | 147.70M | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | 273.90M | 273.90M | 583.50M | 438.20M | -242.50M | 164.60M |
| Operating Cash Flow | 371.30M | 371.30M | 667.50M | 531.00M | -129.00M | 271.50M |
| Investing Cash Flow | -112.10M | -112.10M | -100.40M | -65.70M | -283.20M | -538.60M |
| Financing Cash Flow | -294.00M | -294.00M | -527.90M | -520.10M | 255.30M | 494.00M |
Scotts Miracle-Gro Company Technical Analysis
Positive
62.34
Price Trends
58.80
Positive
57.44
Positive
58.80
Positive
Market Momentum
1.34
Positive
52.94
Neutral
73.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMG, the sentiment is Positive. The current price of 62.34 is below the 20-day moving average (MA) of 62.52, above the 50-day MA of 58.80, and above the 200-day MA of 58.80, indicating a neutral trend. The MACD of 1.34 indicates Positive momentum. The RSI at 52.94 is Neutral, neither overbought nor oversold. The STOCH value of 73.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SMG.
Scotts Miracle-Gro Company Risk Analysis
Scotts Miracle-Gro Company disclosed 41 risk factors in its most recent earnings report. Scotts Miracle-Gro Company reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Scotts Miracle-Gro Company Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.09B | 8.60 | 42.00% | 12.33% | 16.52% | 141.96% | |
65 Neutral | $8.73B | 7.13 | 10.00% | 3.70% | 3.82% | 239.39% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | $6.91B | 18.71 | 6.15% | 3.36% | 1.77% | -8.72% | |
58 Neutral | $440.94M | -2.16 | -33.37% | ― | 8.88% | -349.99% | |
52 Neutral | $3.73B | 43.42 | ― | 4.52% | -3.93% | ― | |
47 Neutral | $1.97B | -3.68 | -11.52% | 16.68% | -13.42% | -136.59% |
* Basic Materials Sector Average
SMG
Scotts Miracle-Gro Company
62.34
-3.88
-5.86%
UAN
CVR Partners
101.81
30.97
43.72%
FMC
FMC
15.65
-36.86
-70.20%
IPI
Intrepid Potash
32.75
6.19
23.31%
MOS
Mosaic Co
27.27
1.04
3.96%
ICL
Icl
5.36
-0.31
-5.47%
Scotts Miracle-Gro Company Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Scotts Miracle-Gro expands equity incentives after shareholder approvals
Positive
Jan 29, 2026
At its January 26, 2026 virtual annual meeting, The Scotts Miracle-Gro Company’s shareholders approved an amendment and restatement of the company’s Long-Term Incentive Plan, increasing the pool of common shares available for grants by 2,750,000 and paving the way for expanded equity-based compensation. Beginning January 30, 2026, Scotts will implement new standard forms of equity award agreements—restricted stock units, performance units and nonqualified stock options for certain employees and named executive officers, as well as restricted stock units and deferred stock units for non-employee directors—reinforcing its use of stock-based incentives to align management and board interests with shareholders. Shareholders also elected four directors to terms running through the 2029 annual meeting, endorsed executive compensation on an advisory basis, and ratified Deloitte & Touche LLP as independent auditor for the fiscal year ending September 30, 2026, with about 91% of outstanding shares represented, underscoring broad investor engagement in the company’s governance and compensation framework.
The most recent analyst rating on (SMG) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Scotts Miracle-Gro Company stock, see the SMG Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Scotts Miracle-Gro Secures $2 Billion Loan Facilities
Positive
Nov 24, 2025
On November 21, 2025, The Scotts Miracle-Gro Company entered into a Seventh Amended and Restated Credit Agreement, securing $2.0 billion in senior secured loan facilities, which includes a $1.5 billion revolving credit facility and a $500 million term loan. This agreement replaces the previous Sixth Amended and Restated Credit Agreement, which had a total of $2.5 billion in loan facilities, indicating a strategic financial restructuring to enhance the company’s financial flexibility.
The most recent analyst rating on (SMG) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Scotts Miracle-Gro Company stock, see the SMG Stock Forecast page.
Business Operations and StrategyExecutive/Board Changes
Scotts Miracle-Gro Updates Long-Term Incentive Plan
Neutral
Nov 12, 2025
On November 13, 2025, Scotts Miracle-Gro Company will implement a new form of restricted stock unit award notice for certain employees, including executive officers, as part of its Long-Term Incentive Plan. This change is expected to impact the company’s compensation strategy and could influence its ability to attract and retain key talent, thereby affecting its competitive positioning in the industry.
The most recent analyst rating on (SMG) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Scotts Miracle-Gro Company stock, see the SMG Stock Forecast page.
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.