GrowGeneration Corp.
GRWG
recently 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, which will make it the largest hydroponic garden centers in Southern California. In addition to offering the largest selection and best-in-class customer service, these centers will also serve as distribution and direct fulfillment centers to service the large commercial markets. These centers will also distribute the company’s private label products that are crucial to its growth plans.
Following this development, GrowGeneration will operate close to 800,000 square feet of retail and warehouse space across 52 locations. Notably, 10 of those are located in the important Southern California market and 19 in the state of California.
GrowGeneration on an Acquisition Spree
GrowGeneration has been active on the acquisition front — making eight buyouts in 2020 and four this year. These acquisitions are in sync with the company’s plans to take its tally of garden center locations to 55 by the end of 2021. The company is also focused on expanding its footprint in California. Hydroponics have been a staple in cannabis cultivation, and as states across the country continue to legalize the latter, the company’s products are in demand. Considering that California accounts for 20% of the United States’ legal cannabis sales and its cannabis market is projected to grow to $5 billion by 2022, it is a crucial market for the company.
In January, GrowGeneration 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 company raised 2021 revenue guidance to the range of $335 million to $350 million. It projects adjusted EBITDA between $38 million and $40 million.
The company has been gaining from ongoing strength in sales on all fronts — online, commercial and retail. The company has rebranded its existing e-commerce operation, HeavyGarden.com and GrowGen.Pro, as growgeneration.com, which is an omni-channel sales approach to facilitate e-commerce across all its locations. It is more customer friendly and provides both options — delivery or pick-up from store. This initiative is expected to bolster sales.
Price Performance
Shares of the company have soared 225.7% in the past six months, compared with the
industry
’s rally of 114.1%.
Zacks Rank & Stocks to Consider
GrowGeneration currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include
Impala Platinum Holdings Limited
IMPUY
,
Fortescue Metals Group Limited
FSUGY
and
BHP Group
BHP
. All of these stocks sport 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 aoared 82% in the past six months.
Fortescue has a projected earnings growth rate of 84.3% for the current fiscal year. The company’s shares have surged 34% in the past six months.
BHP Group has an estimated earnings growth rate of 65.6% for the current fiscal year. The company’s shares have appreciated 40% over the past six months.
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