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urban-gro (UGRO)
NASDAQ:UGRO
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urban-gro
(NASDAQ:UGRO)
38Underperform
urban-gro (UGRO) vs. S&P 500 (SPY)
Market Cap
$7.62M
Dividend YieldN/A
Average Volume (3M)47.80K
Price to Earnings (P/E)―
Beta (1Y)0.05
Revenue Growth12.08%
EPS Growth25.82%
CountryUS
Employees130
SectorIndustrials
Sector Strength72
IndustryIndustrial Machinery
Share Statistics
EPS (TTM)-1.60
Shares Outstanding12,696,557
10 Day Avg. Volume32,145
30 Day Avg. Volume47,800
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.13
Price to Cash Flow (P/CF)1.90
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.00Price Target Upside400.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
urban-gro Business Overview & Revenue Model
Company DescriptionUrban-gro Inc is an agricultural solutions and ag-tech company focused on serving commercial cultivators around the world. It offers various equipment and products such as Pesticides & Equipment, Climate Control equipment, Fertigation products, Wastewater Treatment equipment and others.
How the Company Makes Moneyurban-gro generates revenue through a combination of design and engineering services, systems integration, and equipment sales. The company provides architectural and engineering design services, which are customized to meet the specific needs of indoor cultivation facilities. In addition, urban-gro sells integrated cultivation systems, including lighting, fertigation, and environmental control systems, which are essential for optimizing indoor growing environments. The company also collaborates with various equipment manufacturers and technology providers to offer comprehensive solutions to its clients, thereby enhancing its revenue stream by bundling these services and products. Significant partnerships with industry-leading manufacturers and a focus on the rapidly growing cannabis and indoor agriculture markets are key factors contributing to urban-gro's earnings.
urban-gro Financial Statement Overview
Summary
urban-gro faces significant financial challenges, with persistent losses and high leverage. Although revenue growth is a positive aspect, the company's profitability metrics are concerning, with negative margins across key income statement indicators. The balance sheet highlights a precarious financial position due to negative equity and high liabilities. Cash flow issues further compound these problems, although there is a slight improvement in free cash flow. The company needs to address operational inefficiencies and financial leverage to improve its financial health.Income Statement
urban-gro's revenue has shown growth over the years, with a notable increase in 2023 compared to previous years. However, the company has consistently reported negative net income, resulting in a negative net profit margin. The gross profit margin has decreased over time, indicating declining efficiency in production or pricing strategy. EBIT and EBITDA margins remain negative, reflecting ongoing operational challenges.42
Neutral
Balance Sheet
The company has a high debt-to-equity ratio, particularly in earlier years, but improved in 2023. Stockholders' equity has significantly decreased, indicating potential financial strain. The equity ratio has declined over time, reflecting increased reliance on liabilities to finance assets. Despite an increase in total assets, the financial position remains weak due to negative equity and high liabilities.38
Negative
Cash Flow
urban-gro has consistently reported negative free cash flow, indicating challenges in generating sufficient cash to cover capital expenditures. The operating cash flow is also negative, reflecting difficulties in sustaining cash from operations. However, the company has improved its free cash flow from 2022 to 2023, showing some progress in cash management.45
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 58.38M | 71.54M | 66.30M | 62.11M | 25.84M | 24.19M | Gross Profit |
| 8.26M | 10.29M | 14.21M | 14.76M | 5.72M | 6.63M | EBIT |
| -12.90M | -16.68M | -12.64M | -147.13K | -2.75M | -5.43M | EBITDA |
| -11.98M | -16.99M | -14.06M | 290.53K | -3.32M | -6.05M | Net Income Common Stockholders |
| -13.59M | -18.68M | -15.28M | -1.90M | -6.34M | -10.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 888.85K | 1.11M | 12.01M | 34.59M | 184.47K | 448.70K | Total Assets |
| 7.97M | 64.38M | 62.07M | 74.16M | 8.16M | 7.41M | Total Debt |
| 3.66M | 5.29M | 6.48M | 694.46K | 8.24M | 4.03M | Net Debt |
| 2.77M | 4.18M | -5.53M | -33.90M | 8.05M | 3.59M | Total Liabilities |
| 11.45M | 44.31M | 27.33M | 25.99M | 15.57M | 12.42M | Stockholders Equity |
| -3.48M | 20.07M | 34.73M | 48.17M | -7.41M | -5.01M |
| Cash Flow | Free Cash Flow | ||||
| -3.01M | -11.81M | -13.19M | -1.86M | -3.81M | -2.72M | Operating Cash Flow |
| -2.87M | -11.19M | -12.61M | -1.56M | -3.63M | -2.49M | Investing Cash Flow |
| -256.26K | 1.71M | -4.45M | -8.34M | -175.97K | -1.15M | Financing Cash Flow |
| 2.81M | -1.41M | -5.52M | 44.31M | 3.54M | 2.91M |
urban-gro Technical Analysis
Negative
0.60
Price Trends
0.81
Negative
1.08
Negative
1.24
Negative
Market Momentum
-0.04
Positive
24.64
Positive
4.97
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UGRO, the sentiment is Negative. The current price of 0.6 is below the 20-day moving average (MA) of 0.77, below the 50-day MA of 0.81, and below the 200-day MA of 1.24, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 24.64 is Positive, neither overbought nor oversold. The STOCH value of 4.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UGRO.
urban-gro Risk Analysis
urban-gro disclosed 41 risk factors in its most recent earnings report. urban-gro reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
urban-gro Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $8.22B | 13.91 | 2.36% | 3.08% | 3.85% | -14.32% | |
46 Neutral | $3.33B | ― | 4.98% | 4.55% | 3.61% | 94.27% | |
45 Neutral | $79.04M | ― | -12.88% | ― | 17.71% | -10.34% | |
43 Neutral | $75.51M | ― | -33.74% | ― | -16.39% | -9.08% | |
38 Underperform | $7.62M | ― | -146.60% | ― | 12.08% | 25.82% | |
37 Underperform | $28.21M | ― | -438.92% | ― | -42.61% | 91.66% | |
32 Underperform | $13.15M | ― | -25.94% | ― | -16.02% | -1.84% |
* Industrials Sector Average
Performance Comparison
UGRO
urban-gro
0.60
-1.32
-68.75%
SMG
Scotts Miracle-Gro Company
57.99
-11.83
-16.94%
GRWG
GrowGeneration
1.27
-1.27
-50.00%
VFF
Village Farms International
0.70
-0.36
-33.96%
HYFM
Hydrofarm Holdings Group
2.85
-6.15
-68.33%
AGFY
Agrify
18.44
12.68
220.14%
urban-gro Earnings Call Summary
Earnings Call Date: Nov 7, 2024 | % Change Since: -58.62% | Next Earnings Date: Mar 26, 2025
Earnings Call Sentiment Neutral
The call conveyed a cautiously optimistic outlook, with notable improvements in cash flow, adjusted EBITDA, and margins, despite challenges such as a decrease in revenue and backlog. The potential rescheduling of cannabis is seen as a significant positive catalyst for the industry.Highlights
Positive Cash Flow and Adjusted EBITDA Improvement
In the first quarter, UGRO had positive cash flow from operations and delivered the strongest quarterly adjusted EBITDA results in two years, with a $3.1 million improvement year-over-year.
Revenue and Margin Growth
Revenue was reported at $15.5 million, with gross profit at $3.1 million or 20% of revenue. This is an improvement from 17% in the prior year period.
Reduction in Operating Expenses
Operating expenses decreased by $2.7 million year-over-year due to expense optimization efforts, and a $2.8 million improvement was realized in general and administrative expenses.
Strong Backlog
UGRO's backlog remained strong at $99 million, despite a slight sequential decrease.
Potential Industry Catalyst
The US Drug Enforcement Agency is reportedly supporting the reclassification of cannabis, which could lead to significant industry growth and increased working capital for operators.
Lowlights
Decrease in Revenue Year-Over-Year
A 7% decrease in revenue compared to the prior year period, driven by reduced construction design-build, equipment systems, and services revenue.
Net Loss
Net loss was reported at $2.1 million or a negative $0.18 per diluted share, although this is an improvement from the previous year.
Backlog Decrease
Backlog decreased by $11 million or 10% on a sequential basis.
Weak European Market
Demand in Europe remains weak, with no significant contract wins in the first quarter.
Company Guidance
During the UGRO Q1 2024 earnings call, the company provided guidance for the full year, maintaining its expectation to recognize more than $84 million in revenue and to generate positive adjusted EBITDA. In Q1, UGRO reported a revenue of $15.5 million, with an adjusted EBITDA loss of $0.3 million, which exceeded their quarterly guidance. The company also highlighted a $3.1 million year-over-year improvement in adjusted EBITDA, driven by reduced operating expenses and improved margins. UGRO's backlog remained strong at $99 million, with 76% of this backlog attributed to the Controlled Environment Agriculture (CEA) sector and 24% to the commercial sector. The company realized a $2.8 million reduction in general and administrative expenses compared to Q1 2023, part of a broader $8 million reduction anticipated for the year. Despite the positive developments, UGRO noted that its guidance does not yet account for potential impacts from recent regulatory changes related to cannabis rescheduling.urban-gro Corporate Events
Delistings and Listing ChangesRegulatory Filings and Compliance
urban-gro Receives Nasdaq Compliance Extension
Neutral
Jan 30, 2025
On January 29, 2025, urban-gro, Inc. announced it received an extension from Nasdaq to regain compliance with Listing Rule 5250(c)(1) by February 18, 2025. The extension allows the company extra time to file its overdue financial reports due to a change in auditors and the need to restate previous financial statements. Despite these delays, the company’s stock remains listed on the Nasdaq Capital Market, and the extension is a strategic step in aligning its financial reporting.
Delistings and Listing ChangesRegulatory Filings and Compliance
urban-gro Faces Nasdaq Non-Compliance and Delisting Risk
Negative
Nov 27, 2024
urban-gro, Inc. faces Nasdaq non-compliance due to delayed financial filings linked to accounting errors in deferred tax liabilities. With a compliance deadline set for January 2025, the company is at risk of delisting if it doesn’t meet the requirements. Despite these challenges, the notice hasn’t immediately affected urban-gro’s stock listing, and the company is actively working to resolve the issues.
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.