Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 30 Sep, 25 | GRWG | Buy | USD 2.09 | USD 2.25 | USD 2.3 | 8 days | Closed |
16.75%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.
Operating Expense Reduction: Store and operating expenses declined 22.9% YoY, from USD 10.2 million in Q2 FY24 to USD 7.9 million in Q2 FY25
Proprietary Brand Sales: Increased to 32.0% of Cultivation & Gardening revenue in Q2 FY25, compared to 21.5% in Q2 FY24 (+10.5 percentage points)
Gross Profit Decline: Gross profit decreased 19.4% YoY, from USD 14.4 million in Q2 FY24 to USD 11.6 million in Q2 FY25
Net Sales Decline: Total net sales fell 23.4% YoY, from USD 53.5 million in Q2 FY24 to USD 41.0 million in Q2 FY25
GrowGeneration faces a high risk of revenue volatility due to dependence on proprietary brand adoption, ongoing retail store consolidations, and persistent pricing pressure in the cultivation products industry
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 2.09 | 1.75 | 2.25 | 2.3 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue Performance: GrowGeneration Corp., the nation’s largest specialty hydroponic and organic gardening retailer, reported second-quarter 2025 net sales of USD 41.0 million. This represented a sequential increase of 14.7%, although it was below the USD 53.5 million achieved in the same quarter of 2024. Within this, Cultivation and Gardening sales declined to USD 32.9 million from USD 46.1 million year-over-year, reflecting a reduced retail footprint. However, the Storage Solutions segment generated USD 8.1 million in sales, improving from USD 7.4 million in the prior year.
Proprietary Brand Growth: A key highlight of the quarter was the significant growth in proprietary brands. Sales from these owned labels rose to 32.0% of Cultivation and Gardening revenue, compared to 21.5% in the second quarter of 2024. This growth was driven by product launches and the continued success of brands such as Char Coir, Drip Hydro, Ion LED lighting, and Viagrow. Management emphasized that proprietary brands remain central to its long-term strategy, with a target of achieving 35.0% contribution by year-end 2025.
Profitability and Margins: Gross profit for the quarter stood at USD 11.6 million, down from USD 14.4 million in the same quarter of 2024. Despite the decline in absolute profit, gross profit margin improved to 28.3% versus 26.9% a year earlier. This margin expansion was attributed to increased proprietary brand penetration and stronger performance in Storage Solutions, partially offset by price compression in third-party cultivation products.
Cost Controls and Expense Management: The company continued its focus on efficiency, with operating expenses reduced by 22.9% year-over-year to USD 7.9 million, down from USD 10.2 million. Selling, general, and administrative expenses also improved, falling by 13.4% to USD 6.2 million. These reductions underscore management’s cost-control initiatives, which are yielding benefits despite a challenging demand environment.
Net Loss and EBITDA: GrowGeneration reported a GAAP net loss of USD 4.8 million for the quarter, compared to a USD 5.9 million loss in the second quarter of 2024. The narrowing loss was largely the result of margin improvements and expense reductions, though it was still pressured by lower sales volumes from store consolidations. Adjusted EBITDA reflected a loss of USD 1.3 million, slightly higher than the USD 1.1 million loss in the prior year, but showing sequential improvements of USD 2.7 million from the first quarter of 2025.
Balance Sheet and Liquidity: As of June 30, 2025, GrowGeneration reported USD 48.7 million in cash, cash equivalents, and marketable securities, with no outstanding debt. Inventory levels were USD 41.7 million, and total current liabilities stood at USD 27.3 million. This strong liquidity position provides flexibility for continued investment in proprietary brands, expansion into international markets, and operational streamlining.
Strategic Outlook: The company highlighted several strategic initiatives undertaken during the quarter, including the expansion of its online B2B portal, entry into the home gardening market, and deeper penetration into mass retail channels through the Viagrow acquisition. Internationally, it established distribution partnerships in the European Union and Costa Rica. However, due to macroeconomic uncertainties, including trade policy shifts, pricing pressures, and changing consumer demand, GrowGeneration has opted not to provide full-year 2025 guidance. For the third quarter, management expects sales to exceed USD 41.0 million, indicating continued sequential growth.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on GrowGeneration Corp. (NASDAQ: GRWG) at the closing market price of USD 2.09, as on Sep 29, 2025
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Specialty Retail
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| GRWG GrowGeneration Corp |
-0.19 8.64% | 2.01 | - | 42.73 | 0.60 | 0.79 | 0.50 | -3.832 |
| ORLY O’Reilly Automotive Inc |
-1.12 1.21% | 91.73 | 25.08 | 25.45 | 4.02 | 210.18 | 4.50 | 19.67 |
| ANCTF Alimentation Couchen Tard Inc A |
1.03 1.95% | 53.77 | 21.36 | 19.46 | 0.76 | 3.91 | 0.92 | 11.48 |
| AZO AutoZone Inc |
23.27 0.69% | 3416.62 | 20.58 | 19.49 | 2.87 | 13.38 | 3.52 | 14.93 |
| TSCO Tractor Supply Company |
-1.24 2.32% | 52.25 | 27.47 | 23.81 | 1.82 | 12.29 | 2.13 | 16.60 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 29,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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