Profitable GrowGeneration Corp Looks Bullish in 2020
GrowGeneration Corp (NASDAQ:GRWG) was one of the cannabis industry’s best-kept secrets. But its under-the-radar status is no more. In addition to reporting record third-quarter revenue and net income, GrowGeneration recently began trading on the Nasdaq.
The stock’s December 2 uplisting to the Nasdaq gave the company more validity and exposure, and it makes things easier for GrowGeneration to raise capital. All that is imperative if the company wants to continue its aggressive expansion across North America.
GrowGeneration stock is currently trading up about 80% year-to-date, but it’s just getting started. A 12-month price forecast of $9.50 per share is not out of the question. That would be a near-term increase of about 135% from its current level.
GRWG Stock Overview
In a gold rush, do you dig for gold or sell shovels? Well, it’s easier to sell shovels. And in most cases, it’s much more lucrative.
The Denver-based GrowGeneration owns and operates the largest chain of specialty hydroponic and organic gardening centers in the United States. It also operates the online superstore “HeavyGardens.” (Source: “GrowGeneration Corp. Investor Presentation 2019,” GrowGeneration Corp., last accessed December 9, 2019.)
In-store and online, customers can choose from thousands of products, basically everything they need to grow pot indoors or outdoors. This includes soil, nutrients, lighting, and other equipment.
GrowGeneration will also help customers design a grow operation and show them how to better harvest their crops.
The company sells its products to both home growers and multi-state operators including Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA), CannaRoyalty Corp (OTCMKTS:ORHOF, CNSX:OH), and Medmen Enterprises Inc (OTCMKTS:MMNFF, CNSX:MMEN).
GrowGeneration currently operates 25 locations in nine states (California, Colorado, Maine, Michigan, Nevada, New Hampshire, Oklahoma, Rhode Island, and Washington).
It also has an aggressive expansion plan for the U.S. and Canada.
GrowGeneration Stock Information
|Market Cap||$151.7 Million|
|Shares Outstanding||36.7 Million|
|50-Day Moving Average||$4.19|
|200-Day Moving Average||$4.10|
(Source: “GrowGeneration Corp. (GRWG),” Yahoo! Finance, last accessed December 9, 2019.)
GrowGeneration Uplisted to Nasdaq
On November 25, GrowGeneration announced that its common shares were approved for listing on the Nasdaq. The shares began trading on the Nasdaq on December 2 under the same ticker the company used while trading over the counter: GRWG. (Source: GrowGeneration Corp. Approved to Begin Trading on Nasdaq Stock Exchange,” GrowGeneration Corp, November 25, 2019.)
“This up-listing to NASDAQ is a major corporate milestone and reflects the financial performance of our Company,” said Darren Lampert, CEO of GrowGeneration.
“We believe our NASDAQ listing will increase long-term shareholder value by improving awareness, liquidity, and appeal to institutional investors.”
Record Third-Quarter Revenue and Earnings
On November 11, GrowGeneration announced that its revenue for the third quarter, ended September 30, increased 159% year-over-year to $21.8 million. Same-store sales advanced 48% during the third quarter. (Source: “GrowGeneration Reports Record Q3 2019 Revenues and Net Income,” GrowGeneration Corp, November 11, 2019.)
The company reported third-quarter net income of $1.0 million ($0.03 per share), versus a net loss of $784,573 (also $0.03 per share) in the third quarter of fiscal 2018.
Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) came in at $2.0 million, compared to an adjusted EBITDA loss of $71,584 in the third quarter of last year.
As of September 30, GRWG had $16.0 million in cash and cash equivalents. Management says that’s enough to allow the company to finalize new acquisition deals, which are expected to close in the fourth quarter and in 2020.
GrowGeneration Corp’s days as an overlooked, underappreciated pot stock appear to be gone.
As mentioned earlier, GRWG stock recently listed on the Nasdaq, where a larger group of investors are discovering just how well run this company is.