Shares of GrowGeneration Corp. (GRWG), which owns and operates specialty retail hydroponic and organic gardening stores, climbed 4.5% on Tuesday to close at $32.46 after the company announced the acquisition of Commercial Grow Supply, a California-based hydroponic superstore. The financial terms of the deal have not been disclosed so far.
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With this buyout, the number of GrowGeneration’s countrywide hydroponic garden centers now stands at 60. Commercial Grow Supply, which has annual revenues of about $10 million, represents GrowGeneration’s 14th acquisition of the year.
The CEO of GrowGeneration, Darren Lampert, said, “As the leading hydroponics retailer in Santa Clarita, Los Angeles County’s third-largest city, Commercial Grow Supply boasts a devoted customer base and unmatched cultivation expertise which will help GrowGen better serve Southern California’s growers.” (See GrowGeneration stock chart on TipRanks)
Recently, Stifel Nicolaus analyst W. Andrew Carter reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $67 to $50, which implies upside potential of 54% from current levels.
According to the analyst, the company’s growth visibility in the burgeoning cannabis category gives it a strong footing. However, the muted guidance for full-year 2021 with just a $5M increase in the revenue outlook remains a cause of concern for the company.
Consensus among analysts is a Strong Buy based on 5 unanimous Buys. The average GrowGeneration price target of $56.60 implies upside potential of 74.4% from current levels. Shares have gained 117.6% over the past year.
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