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Hydrofarm Holdings Group Inc (HYFM)
:HYFM
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Hydrofarm Holdings Group
(NASDAQ:HYFM)
32Underperform
Hydrofarm Holdings Group (HYFM) vs. S&P 500 (SPY)
Market Cap
$10.75M
Dividend YieldN/A
Average Volume (3M)31.36K
Price to Earnings (P/E)―
Beta (1Y)0.87
Revenue Growth-16.02%
EPS Growth-1.84%
CountryUS
Employees369
SectorIndustrials
Sector Strength70
IndustryIndustrial Machinery
Share Statistics
EPS (TTM)-14.51
Shares Outstanding4,614,279
10 Day Avg. Volume24,979
30 Day Avg. Volume31,364
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.07
Price to Cash Flow (P/CF)1.20
P/FCF Ratio0.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$0.65Price Target Upside-72.80% Downside
Rating ConsensusHold
Number of Analyst Covering1
Hydrofarm Holdings Group Business Overview & Revenue Model
Company DescriptionHydrofarm Holdings Group, Inc. is a leading distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture. The company operates primarily in the United States and Canada, providing a comprehensive range of products that include lighting systems, growing media, nutrients, and other essential components for indoor and urban gardening. Hydrofarm serves a diverse customer base, including commercial growers, retailers, and individual hobbyists, through a network of distribution centers and retail outlets.
How the Company Makes MoneyHydrofarm Holdings Group generates revenue through the sale of a wide array of hydroponic products and equipment. The company's core revenue streams include the distribution of branded and proprietary products, such as lighting solutions, climate control systems, and specialty growing media. Additionally, Hydrofarm benefits from strategic partnerships with manufacturers and suppliers, enabling them to offer a broad product portfolio. The company's revenue is further bolstered by its focus on high-demand markets like cannabis cultivation, where controlled environment agriculture is essential for optimizing plant growth and yield. By leveraging its extensive distribution network and industry expertise, Hydrofarm consistently captures a significant share of the growing indoor agriculture sector.
Hydrofarm Holdings Group Financial Statement Overview
Summary
Hydrofarm Holdings Group is facing significant financial challenges with declining revenues from $479.42M in 2021 to $190.29M in 2024, persistent losses, and negative cash flows. The balance sheet shows increased leverage, posing potential risks. Improvements are needed in revenue generation, cost control, and debt management.Income Statement
Hydrofarm Holdings Group has experienced declining revenue over recent years, with a significant drop from $479.42M in 2021 to $190.29M in 2024. The company has consistently reported negative net income and EBIT margins, indicating ongoing operational challenges. Gross profit margin has also decreased, suggesting pressure on profitability.30
Negative
Balance Sheet
The company's debt-to-equity ratio has increased over time, reflecting rising leverage which may pose a risk to financial stability. However, the equity ratio remains reasonable at 52.5% in 2024, indicating that a substantial portion of assets is financed by equity. Return on equity is negative due to consistent net losses.45
Neutral
Cash Flow
Hydrofarm has struggled with cash flow, as evidenced by negative free cash flow in 2024 and volatile operating cash flow. The company has faced difficulties converting net income into cash, reflected in negative free cash flow to net income ratios, which raises concerns about liquidity management.25
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 190.29M | 226.58M | 344.50M | 479.42M | 342.20M | Gross Profit |
| 32.13M | 37.61M | 29.34M | 101.49M | 63.63M | EBIT |
| -52.18M | -38.43M | -89.27M | -2.40M | -1.57M | EBITDA |
| -19.92M | -17.51M | -229.62M | 17.01M | 13.69M | Net Income Common Stockholders |
| -66.72M | -64.81M | -285.42M | 13.42M | -7.27M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 26.11M | 30.31M | 21.29M | 26.61M | 75.18M | Total Assets |
| 426.10M | 507.64M | 573.56M | 891.24M | 275.80M | Total Debt |
| 169.53M | 183.93M | 186.07M | 167.57M | 20.06M | Net Debt |
| 143.41M | 153.62M | 164.78M | 140.97M | -55.12M | Total Liabilities |
| 202.38M | 217.03M | 223.68M | 256.06M | 64.88M | Stockholders Equity |
| 223.72M | 290.61M | 349.88M | 635.18M | 210.92M |
| Cash Flow | Free Cash Flow | |||
| -324.00K | 2.83M | 13.76M | -50.47M | -46.33M | Operating Cash Flow |
| -324.00K | 7.04M | 21.99M | -45.07M | -44.83M | Investing Cash Flow |
| 1.67M | -4.17M | -8.49M | -468.18M | 546.00K | Financing Cash Flow |
| -4.78M | 6.07M | -20.20M | 464.71M | 88.14M |
Hydrofarm Holdings Group Technical Analysis
Negative
2.39
Price Trends
5.02
Negative
5.73
Negative
6.11
Negative
Market Momentum
-0.77
Positive
16.80
Positive
2.62
Positive
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 2.39 is below the 20-day moving average (MA) of 3.44, below the 50-day MA of 5.02, and below the 200-day MA of 6.11, indicating a bearish trend. The MACD of -0.77 indicates Positive momentum. The RSI at 16.80 is Positive, neither overbought nor oversold. The STOCH value of 2.62 is Positive, 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $97.64B | 8.67 | -503.31% | 7.05% | -0.28% | 43.51% | |
62 Neutral | $8.33B | 14.18 | 2.58% | 3.07% | 3.83% | -14.77% | |
53 Neutral | $966.03M | ― | -23.33% | ― | 0.67% | 19.14% | |
46 Neutral | $3.26B | ― | 4.98% | 4.65% | 3.61% | 94.27% | |
43 Neutral | $70.16M | ― | -33.74% | ― | -16.39% | -9.08% | |
37 Underperform | $36.91M | ― | -438.92% | ― | -42.61% | 91.66% | |
32 Underperform | $10.75M | ― | -25.94% | ― | -16.02% | -1.84% |
* Industrials Sector Average
Performance Comparison
HYFM
Hydrofarm Holdings Group
2.33
-8.07
-77.60%
MO
Altria Group
57.75
17.37
43.02%
SMG
Scotts Miracle-Gro Company
57.08
-13.74
-19.40%
GRWG
GrowGeneration
1.14
-1.91
-62.62%
TSE:CURA
Curaleaf Holdings
1.25
-6.18
-83.18%
AGFY
Agrify
19.67
13.89
240.31%
Hydrofarm Holdings Group Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -47.93% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
Hydrofarm has faced significant challenges in the fourth quarter of 2024, with notable declines in sales and profitability, primarily due to industry-wide oversupply issues and a slip in proprietary brand sales mix. Despite these setbacks, the company has made significant progress in areas such as proprietary brand sales mix, e-commerce growth, and SG&A cost savings. The efforts to increase revenue diversification and optimize operations provide a positive outlook, but immediate challenges still weigh heavily.Highlights
Increased Proprietary Brand Sales Mix
Hydrofarm improved its proprietary brand sales mix from approximately 35% in 2020 to 56% in 2024, which contributed to operating profitably for most quarters over the past two years.
Strong E-commerce Growth
U.S. sales in the e-commerce channel increased over 25% in 2024, showing strong channel performance for home-growing solutions.
Manufacturing and Distribution Footprint Reduction
Since 2023, Hydrofarm reduced its manufacturing footprint by nearly 60% and invested in productivity-enhancing capital equipment, improving operating efficiencies.
SG&A Savings Achieved
Hydrofarm delivered 10 consecutive quarters of meaningful year-on-year adjusted SG&A savings and is now operating below pre-IPO dollar costs.
Revenue Diversification
The company achieved a nearly 200 basis point increase in sales to non-cannabis and non-U.S. Canadian customers in 2024, indicating progress in revenue diversification.
Lowlights
Q4 2024 Sales Decline
Net sales for the fourth quarter were $37.3 million, down 20.9% year-over-year, primarily driven by a 16.8% decrease in volume mix and a 3.9% decline in pricing.
Profitability Challenges
Adjusted EBITDA was a loss of $7.3 million in the fourth quarter due to lower sales and adjusted gross profit, despite SG&A savings.
Industry Oversupply Impact
Persistent oversupply challenges in the cannabis industry and further retail store closings led to lower sales across the supply chain.
Proprietary Brand Sales Mix Slip
In October and November, the proprietary sales mix slipped, significantly pressuring profitability for the quarter and impacting full-year results.
Decreased Gross Profit
Gross profit in the fourth quarter was $1.8 million or 4.9% of net sales, down from $8.4 million or 17.9% of net sales in the prior year.
Company Guidance
During the Hydrofarm Holdings Group Fourth Quarter and Fiscal Year 2024 Earnings Conference Call, the company reported net sales of $37.3 million for the fourth quarter, a 20.9% decrease year-over-year, primarily due to a 16.8% drop in volume mix and a 3.9% decline in pricing. The full year 2024 adjusted EBITDA and free cash flow fell short of guidance, despite successful reductions in adjusted SG&A expenses. The proprietary brand sales mix improved from 35% in 2020 to 56% in 2024, although this slipped to 52% in Q4. The company plans to focus on high-margin proprietary brands, further reduce SG&A expenses, and increase non-cannabis and non-U.S. Canadian sales mix in 2025. Hydrofarm also achieved a 10% reduction in adjusted SG&A expenses in Q4 and aims to optimize its distribution network and manage financial positions to improve profit margins and free cash flow. For 2025, Hydrofarm expects a 10-20% decline in net sales compared to 2024 but anticipates improved adjusted gross profit margins and adjusted EBITDA due to proprietary brand mix enhancements and operational efficiencies. The company ended 2024 with a cash balance of $26.1 million and $128 million in total debt, maintaining $39 million in total liquidity.Hydrofarm Holdings Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Hydrofarm Holdings Reports 2024 Financial Results
Negative
Mar 5, 2025
On March 5, 2025, Hydrofarm Holdings Group announced its financial results for the fourth quarter and full year of 2024, revealing a decrease in net sales and an increased net loss compared to the previous year. Despite challenging industry conditions, the company managed to maintain annual sales within its full-year outlook and achieved significant cost savings. The strategic focus on proprietary brands increased their sales mix to 56% in 2024. Looking forward to 2025, Hydrofarm plans to reinvigorate its proprietary brand sales, optimize its distribution network, and implement additional cost-saving measures, with a focus on e-commerce growth and revenue diversification.
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.