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GrowGeneration (GRWG)
NASDAQ:GRWG
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GrowGeneration
(NASDAQ:GRWG)
43Neutral
GrowGeneration (GRWG) vs. S&P 500 (SPY)
Market Cap
$68.38M
Dividend YieldN/A
Average Volume (3M)776.86K
Price to Earnings (P/E)―
Beta (1Y)2.36
Revenue Growth-16.39%
EPS Growth-9.08%
CountryUS
Employees400
SectorConsumer Cyclical
Sector Strength51
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)-0.83
Shares Outstanding59,458,015
10 Day Avg. Volume891,478
30 Day Avg. Volume776,860
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.40
Price to Cash Flow (P/CF)17.60
P/FCF Ratio19.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.63Price Target Upside128.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
GrowGeneration Business Overview & Revenue Model
Company DescriptionGrowGeneration Corp. is a leading specialty retail chain focused on the supply of hydroponic and organic gardening products. The company caters to commercial and home growers, offering a wide range of products including nutrients, lighting, and other cultivation supplies. GrowGeneration operates multiple retail locations across the United States and serves as a key supplier within the agricultural and horticultural sectors.
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 Financial Statement Overview
Summary
GrowGeneration faces significant financial challenges, with declining revenues and profitability impacting its income statement. While the balance sheet shows manageable leverage, the cash flow statement emphasizes issues with cash generation. These factors combined suggest a need for strategic changes to improve financial health and long-term viability.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 200.88M | 188.87M | 225.88M | 278.17M | 422.49M | 193.37M | Gross Profit |
| 41.37M | 43.72M | 61.26M | 70.26M | 118.24M | 51.05M | EBIT |
| -38.66M | -51.97M | -49.84M | -38.31M | 15.00M | 8.44M | EBITDA |
| -36.87M | -30.30M | -29.76M | -149.48M | 27.87M | 11.03M | Net Income Common Stockholders |
| -53.48M | -49.51M | -46.50M | -163.75M | 12.79M | 5.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 14.64M | 56.45M | 64.97M | 71.91M | 81.17M | 177.91M | Total Assets |
| 35.89M | 174.35M | 239.09M | 293.44M | 459.34M | 354.73M | Total Debt |
| 2.86M | 37.03M | 42.47M | 48.84M | 45.56M | 12.72M | Net Debt |
| -11.78M | 9.56M | 12.71M | 8.79M | 4.19M | -165.19M | Total Liabilities |
| 5.83M | 54.26M | 65.69M | 77.05M | 88.05M | 37.74M | Stockholders Equity |
| 30.06M | 120.09M | 173.40M | 216.40M | 371.29M | 317.00M |
| Cash Flow | Free Cash Flow | ||||
| -6.81M | -3.78M | -5.28M | -948.00K | -13.58M | -4.64M | Operating Cash Flow |
| -4.23M | -1.80M | 1.42M | 11.95M | 5.16M | -213.79K | Investing Cash Flow |
| 6.49M | 5.73M | -11.40M | -11.57M | -139.32M | -45.83M | Financing Cash Flow |
| -6.24M | -6.21M | -313.00K | -1.69M | -2.38M | 210.98M |
GrowGeneration Technical Analysis
Negative
1.15
Price Trends
1.30
Negative
1.55
Negative
1.86
Negative
Market Momentum
-0.03
Negative
45.23
Neutral
58.21
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 1.15 is above the 20-day moving average (MA) of 1.13, below the 50-day MA of 1.30, and below the 200-day MA of 1.86, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 58.21 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 0 New Risks
GrowGeneration Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
59 Neutral | $12.60B | 11.17 | 0.97% | 3.72% | 1.34% | -21.34% | |
51 Neutral | $966.03M | ― | -23.33% | ― | 0.67% | 19.14% | |
47 Neutral | $345.22M | 27.05 | 4.78% | ― | 16.39% | -98.10% | |
46 Neutral | $3.28B | ― | 4.98% | 4.63% | 3.61% | 94.27% | |
43 Neutral | $68.38M | ― | -33.74% | ― | -16.39% | -9.08% | |
32 Underperform | $10.75M | ― | -25.94% | ― | -16.02% | -1.84% |
* Consumer Cyclical Sector Average
Performance Comparison
GRWG
GrowGeneration
1.15
-1.71
-59.79%
SMG
Scotts Miracle-Gro Company
57.25
-14.51
-20.22%
TSE:ACB
Aurora Cannabis
6.60
0.67
11.30%
TSE:CURA
Curaleaf Holdings
1.42
-5.82
-80.39%
HYFM
Hydrofarm Holdings Group
2.19
-8.61
-79.72%
GrowGeneration Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: 18.56% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call indicates a company in transition, with significant efforts made towards restructuring and focusing on proprietary brands, leading to some positive outcomes like increased proprietary brand sales and a strong cash position. However, challenges such as a decline in net revenue, reduced gross profit margin, and continued net losses indicate struggles in the transition period.Highlights
Increase in Proprietary Brand Sales
Proprietary brands accounted for 24.2% of total net sales in 2024, up from 18.8% in 2023. This segment grew to 30.4% of Cultivation and Gardening revenue in Q4 2024, compared to 21.2% in Q4 2023.
Successful Strategic Restructuring
The company executed a strategic restructuring, focusing on transitioning from store reliance to a product-driven, B2B business model, which is expected to drive revenue growth and improve margins.
Launch of B2B E-commerce Platform
A new B2B e-commerce platform was launched in Q4 2024, receiving positive customer feedback and expected to enhance customer experience and operational efficiency.
Strong Cash Position and No Debt
GrowGeneration ended 2024 with $56.5 million in cash and marketable securities, and no debt, providing financial flexibility for future growth.
Positive Same-Store Sales Growth
The company reported its second consecutive quarter of positive same-store sales growth in Q4 2024, with a 1% year-over-year increase.
Lowlights
Decline in Net Revenue
2024 net sales were $188.9 million, down from $225.9 million in 2023, largely due to the closure of 19 retail locations.
Decrease in Gross Profit Margin
Gross profit margin for Q4 2024 was 16.4%, down from 23.5% in Q4 2023, primarily due to inventory disposal costs and strategic discounting.
Net Loss and Decrease in Adjusted EBITDA
Net loss for Q4 2024 was $23.3 million, an improvement from Q4 2023, but adjusted EBITDA decreased to negative $8.1 million compared to negative $3.7 million in the same period last year.
Decrease in Storage Solutions Revenue
Net sales of commercial fixtures within the Storage Solutions segment decreased 41% to $4.5 million in Q4 2024 compared to $7.7 million in Q4 2023.
Company Guidance
During the GrowGeneration Fourth Quarter and Full Year 2024 Earnings Conference Call, the company reported a full year 2024 net revenue of $188.9 million, with proprietary brand sales contributing $39.5 million, representing 24.2% of total net sales. The company has streamlined operations, closing 19 stores to focus on a product-driven, business-to-business model, resulting in a total of 31 operational stores and two regional distribution centers. For 2025, GrowGeneration projects net revenue between $170 million to $180 million, with an adjusted EBITDA range of a $2 million loss to a $2 million profit. The gross profit margin for the fourth quarter of 2024 was 16.4%, impacted by inventory disposal costs, with a 2025 margin target of 30%. GrowGeneration ended 2024 with no debt and $56.5 million in cash and marketable securities, completing a $6 million share repurchase program. The company anticipates sequential margin improvement and aims to increase proprietary brand sales to 35% of Cultivation and Gardening net sales by the end of 2025.GrowGeneration Corporate Events
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.
Business Operations and StrategyFinancial Disclosures
GrowGeneration Outlines 2025 Strategic Plans in Shareholder Letter
Positive
Feb 6, 2025
On February 6, 2025, GrowGeneration issued a shareholder letter highlighting its 2024 achievements and outlining its strategic plans for 2025. The company reported significant progress in transforming into a product-driven, B2B-focused organization, increasing proprietary brand sales, and launching a new B2B e-commerce platform. In 2024, GrowGeneration streamlined operations, met its store closure targets, and improved efficiencies, which are expected to reduce expenses by approximately $12 million annually. The company anticipates 2024 net sales between $188 million and $190 million, with a debt-free balance sheet and strong cash position. Looking forward, GrowGeneration aims to expand its proprietary brands and market reach while maintaining operational efficiencies and exploring strategic acquisitions, positioning itself for growth and innovation in 2025.
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.