GrowGeneration (GRWG) Buys to Aid Commercial Growers

Zacks Equity Research
·3-min read

GrowGeneration Corp. GRWG acquired, a leading wholesale agriculture platform that enables commercial growers to manage their purchasing and logistics in one platform. This buyout will aid GrowGeneration to enhance its offerings for commercial clients in a bid to help growers navigate the complexities involved in planning, growing and sustaining agriculture facility. This is the company’s eighth acquisition this year.

Based in Denver, CO, offers commercial pricing, real-time inventory, and has one of the largest product catalogs in the industry. will likely contribute revenues of around $20 million for GrowGeneration in the current year.

GrowGeneration helps retail and craft growers as well as many of the United States’ major multi-state operators (MSOs) to efficiently grow cannabis indoors. The company is focused on enhancing its commercial services, ranging from facility design and consulting to product pricing, as well as to deliver the best support for large growers. The latest buyout will allow GrowGeneration to provide technical and customized experience for its commercial customers, while its e-commerce platform will fulfill the needs of retail and craft growers looking for the best selection and prices.

Recently, GrowGeneration acquired Aquarius Hydroponics, an indoor-outdoor garden supply center specializing in hydroponics systems, lighting and nutrients. It also acquired Char Coir, which helped expand its private label offerings.

Earlier this month, the company announced that it has signed two new leases in Los Angeles County, CA, as the future sites of two new GrowGeneration Super Hydroponic Garden Centers. These leases represent 122,000 square feet of retail and distribution space.

GrowGeneration has been active on the acquisition front — making eight buyouts so far this year, expanding its portfolio of hydroponic garden centers to 52 stores across 12 states. The company is close to its target of achieving 55 garden center locations by the end of 2021.

In January, GrowGeneration pre-announced record full-year 2020 revenues and hiked the revenue guidance for the current year. The company’s full-year 2020 revenues were $192 million compared with $80 million in 2019. Management raised the 2021 revenue guidance to the range of $335 million to $350 million. It projects adjusted EBITDA to lie between $38 million and $40 million.

Price Performance

Shares of the company have soared 273.2% in the past six months compared with the industry’s growth of 67.9%.

Zacks Rank & Stocks to Consider

GrowGeneration currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Impala Platinum Holdings Limited IMPUY, Fortescue Metals Group Limited FSUGY and Ashland Global Holdings Inc. ASH, all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal year. The company’s shares have surged 84% in the past year.

Fortescue has a projected earnings growth rate of 84.3% for the current fiscal year. The company’s shares have soared 182% in a year’s time.

Ashland has an estimated earnings growth rate of 83.9% for the current fiscal year. The company’s shares have appreciated 109.2% over the past year.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Ashland Global Holdings Inc. (ASH) : Free Stock Analysis Report

Impala Platinum Holdings Ltd. (IMPUY) : Free Stock Analysis Report

Fortescue Metals Group Ltd. (FSUGY) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research