GrowGeneration Corp.
GRWG
recently announced that it is launching its popular and leading mono-silicic acid product Power Si in Canada. This groundbreaking product, which has consistently improved the yield, strength and lateral branching of crops, is in high demand in countries worldwide. Given the long wait and the interest generated in Canada for the product, it is expected to be received well. GrowGeneration has entered into an agreement with GreenPlanet Wholesale for the distribution of the product.
GrowGeneration added the Power Si brand of silicic acid-enriched fertilizers in December 2020 when it acquired its parent company Canopy Crop Management. Established in 2019, Southern California based- Canopy Crop Management is recognized as the industry’s leading silicic acid company. With this buyout, GrowGeneration expanded its portfolio of private label products within the nutrient and additive space. Notably, private label expansion is a strategic priority for GrowGeneration, and a key component of its long-term revenue generation plan.
Power Si is a proprietary organic biomix containing highly bioavailable micro and macro nutrients. It reduces nutrient salt build-up and dehydration of crops, and helps build stronger cell walls decreasing susceptibility to various diseases, thus resulting in stronger plants and thicker stems. Widely used in North America, the product facilitates fast, visible and structured periods of both vegetative and flowering growth. It is expected to boost the company’s sales in the Canadian markets as well.
GrowGeneration 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.
Further, the company has been on an acquisition spree since last year taking its store tally to 55 stores across 12 states. At this pace, the company seems close to its target of achieving 60 garden center locations by the end of 2021. It intends to take the total to 100 by 2023. Its strategy is to grow revenues and net income through same store sales, private label and investing in expanding its supply chain through store openings and acquisitions.
The U.S Hydroponics market has immense potential and is expected to witness a CAGR of 12% over 2019-2025 to $16 billion. Further, hydroponics have been a staple in cannabis cultivation. As more and more states across the country continue to legalize cannabis, the company’s products are in demand.
Last month, GrowGeneration reported first-quarter 2021 record earnings per share of 10 cents, which marked a turnaround from a loss of 6 cent per share in the prior-year quarter courtesy of its focus on strategic growth in key markets both organically and through acquisitions, and efforts to reduce operational costs. Revenues amounted to $902 million in the quarter, reflecting a whopping year-over-year growth of 173%. Comparable Store Sales for the quarter was up 51% from the last year. Growth in e-commerce channel and Private-label sales also contributed to the upside.
The company projects revenues in 2021 between $450 million and $470 million. It had reported revenues of $193 million in 2020. Full-year adjusted EBITDA guidance has been raised to the range of $54 million to $58 million.
Share Price Performance
Over the past year, GrowGeneration has soared 468.5% compared with the
industry
’s rally of 74.5%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
GrowGeneration currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Some other top-ranked stocks in the basic materials space include
The Andersons, Inc.
ANDE
,
Dow Inc.
DOW
and
Southern Copper Corporation
SCCO
. All of these stocks flaunt a Zacks Rank #1 currently.
Andersons has a projected earnings growth rate of 1944% for the current fiscal year. The company’s shares have soared nearly 122% in the past year.
Dow has an estimated earnings growth rate of 275% for the current fiscal year. The company’s shares have gained roughly 56% in a year’s time.
Southern Copper has an expected earnings growth rate of 117% for the current fiscal year. The company’s shares have rallied around 75% over the past year.
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