GrowGeneration Continues Uptrend With New Hydroponics Retail Acquisition

Summary

• GrowGeneration acquired Grow Warehouse, a hydroponics chain in Colorado, giving them 46 locations in the US.
• GrowGeneration’s financials show a positive net income and EPS with at least 100% YoY growth.
• GrowGeneration’s stock price is up 93% in three months and 790% in one year.
• The company’s stock price is likely to stabilize at $70 by the summer’s end; it trades highest in August.
• A long-hold strategy should be considered with a gain of 20% or more in six months.

GrowGeneration (NASDAQ:GRWG) is an essential cannabis support stock, which should be considered by the investor because of its recent uptrend and gains. The company sells grow equipment and hydroponic supplies to the cannabis growing community, including the commercial industry. They are the largest hydroponic dealers in America and currently hold 46 locations across America. Their services are essential to the cannabis industry and their profits show that they deliver on their promise. Professional grow facilities use a lot of supplies, especially lights, grow media, and nutrients. The farmer constantly needs these items, which are not abundantly available.

GrowGeneration announced last Tuesday, Feb. 16^th their acquisition of Grow Warehouse, a hydroponics retail chain in Colorado with four locations. The acquisition comes as part of the company’s strategy of expansion. Their stock price has seen some breakouts because of the news. They acquired six other businesses between February and October 2020. Their finances continue to grow with profits and assets. Analysts predict a 128% growth in their stock price for 2021.

GrowGeneration runs a chain of hydroponic garden centers in America. They sell grow media, nutrients, indoor and greenhouse lighting, ventilation systems, accessories for hydroponic growing, and consulting services. Their audience ranges from hobby growers to commercial farmers. They have retail locations in California, Michigan, Colorado, Oklahoma, Maine, Nevada, Washington, Oregon, Rhode Island, and Florida. They also run an e-commerce site and provide financing. The company plans to open and acquire more stores by the end of the year.

GrowGeneration’s Balance Sheet Has Positive Income, Low Debt, High Cash

	Q3*	Q2**
CAP	761M	313M
Cash	55.3M	14.8M
Debt	189K	213K
Total Assets	139.7M	87.8M
Total Liabilities	27.4M	23.8M
Sales	55M	43M
Operating Expenses	14.5M	8.7M
Net Income	3.3M	2.5M
EPS	.06	.06
EBITDA	6.6M	3.1M
EV***	755M	313M

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Analyst’s Disclosure:I am/we are long GRWG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.