GrowGeneration Corp.
GRWG
reported fourth-quarter 2020 adjusted earnings per share of 3 cents, which marked a turnaround from a loss of 1 cent per share in the prior-year quarter. The company’s continued focus on rapid, strategic growth in key markets both organically and through acquisitions, and efforts to reduce operational costs, have aided results. However, the bottom line missed the Zacks Consensus Estimate of 6 cents per share.
The company generated revenues of $62 million in fourth-quarter 2020, reflecting year-over-year growth of 144%. The top line beat the Zacks Consensus Estimate of $61 million. Addition of 14 stores in 2020 and increase in same store sales of 58% led to growth in revenues in the quarter. Growth in e-commerce channel and commercial business also contributed to the improved revenues.
Store operating costs were around $6 million compared to $3 million in the prior-year quarter. As a percentage of revenues, store operating costs were 10% compared to 10.8% for the last-year quarter. Adjusted EBITDA was $5.6 million in the reported quarter, reflecting a surge of 515%. Adjusted EBITDA margin was 9% compared with 3.6% in the year-ago quarter.
2020 Results
GrowGeneration reported earnings per share of 11 in 2020 compared with 4 cents in the prior year. The Zacks Consensus Estimate was 15 cents per share. Sales soared 142.5% year over year to a record $193 million that beat the Zacks Consensus Estimate of $192 million.
Financial Performance
GrowGeneration reported cash and cash equivalents of around $178 million at the end of 2020, up from $13 million at the end of 2019. At the end of 2020, long-term debt was $158 million, down from $242 million as of end of 2019. So far this year, the company has made eight acquisitions.
2021 Guidance
The company hiked its revenue guidance for 2021 to $415-$430 million from the prior guidance of $335 million to $350 million. Full-year adjusted EBITDA guidance has been raised to the range of $48.0 million to $51.0 million from the prior $38 million and $40 million. For the first quarter of 2021, the company expects revenues between $86 million and $88 million. Adjusted EBITDA is expected to range between $9.0 million and $9.5 million in the ongoing quarter.
From the current tally of 52 stores across 12 states, GrowGeneration expects to have over 60 garden centers and 15 states in 2021, and to reach over 100 by 2023.
Share Price Performance
Over the past six months, GrowGeneration has gained 211.3% compared with the
industry
’s rally of 54.9%.
Zacks Rank & Stocks to Consider
GrowGeneration currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include
Impala Platinum Holdings Limited
IMPUY
,
Fortescue Metals Group Limited
FSUGY
and
Ashland Global Holdings Inc.
ASH
, all sporting a Zacks Rank #1 (Strong Buy), at present. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal year. The company’s shares have surged 110% in the past six months.
Fortescue has a projected earnings growth rate of 84.3% for the current fiscal year. The company’s shares have soared 31% in the past six months.
Ashland has an estimated earnings growth rate of 83.9% for the current fiscal year. The company’s shares have appreciated 23% over the past six months.
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