Shares of GrowGeneration Corp. (GRWG), which owns and operates specialty retail hydroponic and organic gardening stores, climbed 4.5% on Tuesday to close at $32.46 after the company announced the acquisition of Commercial Grow Supply, a California-based hydroponic superstore. The financial terms of the deal have not been disclosed so far.
With this buyout, the number of GrowGeneration’s countrywide hydroponic garden centers now stands at 60. Commercial Grow Supply, which has annual revenues of about $10 million, represents GrowGeneration’s 14th acquisition of the year.
The CEO of GrowGeneration, Darren Lampert, said, “As the leading hydroponics retailer in Santa Clarita, Los Angeles County’s third-largest city, Commercial Grow Supply boasts a devoted customer base and unmatched cultivation expertise which will help GrowGen better serve Southern California’s growers.” (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 54% 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 $5M 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 74.4% from current levels. Shares have gained 117.6% over the past year.
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