GrowGeneration Corp. (GRWG), which owns and operates specialty retail hydroponic and organic gardening stores, recently announced that it has agreed to acquire Hoagtech Hydroponics, a hydroponic equipment and indoor gardening store that serves the Bellingham, Washington area. The financial terms of the deal have been kept under wraps.
Following the news, shares of the company jumped 5.4% on Monday. Moreover, it added to its gains marginally to close at $31.15 in extended trade.
With this buyout, the total number of GrowGeneration’s countrywide hydroponic garden centers now stands at 59. Post the buyout, Dan Hoag, the founder of Hoagtech Hydroponics, and his team of eight cultivation experts will become a part of GrowGeneration.
The CEO of GrowGeneration, Darren Lampert, said, “This transaction expands our footprint in the Pacific Northwest and puts us in close proximity to some of the state’s largest commercial operators. Further, Bellingham is located near two major Pacific Northwest cites, Vancouver, British Columbia and Seattle, WA. With the addition of Hoagtech Hydroponics, we expect the Washington market to generate annual revenues approaching $15 million annually.” (See GrowGeneration stock chart on TipRanks)
Recently, Stifel Nicolaus analyst W. Andrew Carter reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $67 to $50, which implies upside potential of 60.9% from current levels.
According to the analyst, the company’s growth visibility in the burgeoning cannabis category gives it a strong footing. However, the muted guidance for full-year 2021 with just a $5 million increase in the revenue outlook remains a cause of concern for the company.
Consensus among analysts is a Strong Buy based on 5 unanimous Buys. The average GrowGeneration price target of $56.60 implies upside potential of 82.2% from current levels. Shares have gained 116.7% over the past year.
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