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GrowGeneration (GRWG) Buys Grow Warehouse, Takes Store Tally to 46

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GrowGeneration Corp. (GRWG - Free Report) recently acquired Grow Warehouse¬ — a four-store chain of hydroponic and organic garden stores based in Colorado and Oklahoma. The acquisition brings GrowGeneration’s total number of hydroponic garden centers to 46, with eight centers in Colorado and five in Oklahoma. Notably, this is the company’s third buyout so far this year. Grow Warehouse was established in 2009 and generates annual revenues of around $20 million.

In November 2020, GrowGeneration acquired The GrowBiz, which is the third largest chain of hydroponic garden centers in the United States. Hydroponics has been a staple in cannabis cultivation and as states across the country continue to legalize cannabis, the company’s products are in demand.

Last month, the company pre-announced record full-year 2020 revenues and hiked its revenue guidance for the current year. GrowGeneration’s full-year 2020 revenues were $192 million compared with $80 million in 2019. The top line outpaced the company’s guidance of $185-$190 million. This performance can be attributed to its strategic acquisitions, expansion of omnichannel and private label offerings, and robust same-store sales growth. The company raised the 2021 revenue guidance to the range of $335 million to $350 million. It projects adjusted EBITDA between $38 million and $40 million.

The company made eight acquisitions in 2020. It has a target to expand to 55 garden centers in 2021. Management estimates that roughly 1,000 hydroponic stores are in operation in the United States and by 2025, the global hydroponics system market is estimated to reach approximately $16 billion.

Price Performance

Shares of the company have soared 866.2% over the past year compared with the industry’s growth of 46.9%.



Zacks Rank & Stocks to Consider

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

Other top-ranked stocks in the basic materials space include Impala Platinum Holdings Limited (IMPUY - Free Report) , Fortescue Metals Group Limited (FSUGY - Free Report) and BHP Group (BHP - Free Report) . While Impala sports a Zacks Rank #1, Fortescue and BHP carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala has an estimated earnings growth rate of a whopping 189.4% for the current fiscal year. The stock has appreciated 51.3% in a year’s time.

Fortescue has a projected earnings growth rate of 75.5% for the current fiscal year. The company’s shares have soared 134% in the past year.

BHP has an expected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 28% over the past year.

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