GrowGeneration Earnings Due After Acquisition Spree, GRWG Stock Surge – Investor's Business Daily

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GrowGeneration (GRWG), a retail chain that sells supplies to small and large cannabis growers, reports fourth-quarter earnings after the close on Wednesday. GRWG stock fell.

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The results follow a string of acquisitions for the company, which is trying to boost its store count and private-label offerings and offer more data products to its customers. GrowGeneration’s expansion also comes as more U.S. states legalize marijuana, leading to predictions of more consolidation in the U.S. cannabis industry.

GrowGeneration Earnings

Estimates: Wall Street expects GrowGeneration earnings to come in at six cents per share, a 700% jump, on a 140% revenue pop to $60.87 million.

The company, in January, reported preliminary fourth-quarter revenue of $61.5 million.

Outlook: Management has previously said it sees 2021 sales of $335 million-$350 million. Wall Street sees $378.3 million.

Results: Due after the close.

GRWG Stock

GRWG stock was down 4.6% in the stock market today, dipping below its 50-day line. Still, shares have a strong 94 Composite Rating. GrowGeneration has an EPS Rating of 74.

Other U.S. marijuana stocks were mixed. Curaleaf (CURLF), a large U.S. pot producer, fell 2%. Innovative Industrial Properties (IIPR), a cannabis-focused real estate investment trust, added 2.9%.

Among Canadian marijuana stocks that trade on U.S. exchanges, Canopy Growth (CGC) fell 2.1%. Tilray (TLRY) lost 2%. Aphria (APHA) fell 1%.

GrowGeneration’s 52 stores, located across 12 states, sell soil, nutrients, lighting and hydroponic equipment to cannabis growers. Seventy percent of its sales come from commercial customers — mostly companies that grow or sell cannabis in multiple states or have large operations in single states.

The chain earlier this week acquired Agron.io, a technology platform that helps large commercial growers manage purchases, supplies, pricing changes, fees and regulations. GrowGeneration said it expected Agron.io, its eighth acquisition this year, to add $20 million in sales this year.


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‘One-Stop Destination’

GrowGeneration said that acquisition would help it become a “one-stop destination” for customers. Stifel analyst Andrew Carter, who covers GRWG stock and other marijuana stocks, said Agron’s consultation services provided GrowGeneration “another avenue for acquiring customers.”

He also said the acquisition would complement GrowGeneration’s existing e-commerce capacity.

“The existing e-commerce platform will continue to service craft growers and hobbyists with GrowGeneration now sporting two online platforms fully positioned to meet the needs of the distinct customer segments,” he said.

In acquiring Agron, GrowGeneration would also compete more directly with similar technology platforms that serve the cannabis industry, like those offered by Akerna (KERN) and others. Akerna rose 2% on Wednesday.

GrowGeneration has also recently acquired a handful of retail stores as well as a producer of hydroponic materials.

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