GrowGeneration (GRWG) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2-min read

GrowGeneration (GRWG) closed at $40.40 in the latest trading session, marking a +0.87% move from the prior day. The stock lagged the S&P 500's daily gain of 1.95%. At the same time, the Dow added 1.85%, and the tech-heavy Nasdaq gained 1.55%.

Prior to today's trading, shares of the company had lost 30.24% over the past month. This has lagged the Basic Materials sector's gain of 3.5% and the S&P 500's loss of 2.45% in that time.

Investors will be hoping for strength from GRWG as it approaches its next earnings release, which is expected to be March 24, 2021. The company is expected to report EPS of $0.06, up 700% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $61.04 million, up 140.49% from the year-ago period.

It is also important to note the recent changes to analyst estimates for GRWG. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.62% higher within the past month. GRWG currently has a Zacks Rank of #3 (Hold).

Investors should also note GRWG's current valuation metrics, including its Forward P/E ratio of 102.17. This valuation marks a premium compared to its industry's average Forward P/E of 21.25.

The Agriculture - Products industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 226, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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