by Ian Harvey
November 13, 2020
GrowGeneration shares rallied after the market closed Wednesday crushing estimates.
Stock Options Made Easy “Mentorship Program” and “Earnings Predictions” Members are now up 289% and 208% respectively.
How high will the stock trade?
The specialty hydroponic and organic gardening retailer announced its third-quarter results after the market closed on Wednesday, and produced excellent numbers.
Much more is expected in the near-term.
GrowGeneration closed Thursday’s trading at $24.30, up $3.36 (+16.05%) and in pre-market trading this morning the share price was already up another $0.40 or 1.65%.
The shares are now attempting to make a new all-time closing high, particularly if the stock market rallies today.
Its shares are up over 450% year to date.
GrowGeneration reported revenue of $55 million in the third quarter, a 153% jump from the $21.8 million generated in the same quarter of the previous year. This result easily beat the average analyst revenue estimate of $47.4 million.
The company announced Q3 net income of $3.3 million, or $0.07 per share, based on generally accepted accounting principles (GAAP). This reflected a huge jump from GrowGeneration's earnings of $1 million, or $0.03 per share, in the prior-year period. It also topped the consensus analyst earnings estimate of $0.06 per share.
GrowGeneration ended the third quarter with cash of $55.3 million. This was an increase from the $13 million on hand as of Dec. 31, 2019.
YOU NEED TO BE IN TO PROFIT!
Let’s Have A Look At The Recommendations…..
……that were executed by “Mentorship Program Members” on Tuesday, October 27, 2020 and “Earnings Predictions Members” on Monday, November 09, 2020.…..and find out why we have call options trade on GrowGeneration shares.
1. The Trade for Mentorship Program Members”
** OPTION TRADE: Buy GRWG JAN 15 2021 20.000 CALLS at approximately $2.50.
“GrowGeneration Corp (NASDAQ: GRWG) is a marijuana stock that has everything going for it. It has a strong balance sheet, it has reported record revenue and net income for 10 consecutive quarters, and it continues to announce new acquisitions and expand into new markets.
Even during a pandemic, GrowGeneration stock continues to thrive, advancing 348% year-over-year, up 342% since the start of 2020, and soaring 590% since hitting March lows.
About GrowGeneration …..
GrowGeneration Corp is the biggest hydroponic equipment supplier in the U.S., with 29 locations in 11 states, including California, Colorado, Michigan, Nevada, Washington, and, most recently, Arizona. The company is also actively targeting Illinois, Missouri, New Jersey, New York, and Pennsylvania.
In addition to a growing list of traditional bricks-and-mortar locations, GrowGeneration also operates the online superstore HeavyGardens.com.
The Denver-based company sells its more than 10,000 hydroponics products to individual home growers and large multi-state operators. GrowGeneration also sells its own private-label products, sold under the “Sunleaves” brand.
GRWG is expected to expand its private-label products and sell them through other retailers.
The company is backed by private-equity from the founders of Cronos Group Inc (NASDAQ:CRON), Gotham Green Partners, Navy Capital, and Merida Capital Partners.”
2. The Trade for “Earnings Predictions Members”
** OPTION TRADE: Buy GRWG NOV 20 2020 25.000 CALLS at approximately $1.60.
“GrowGeneration Corp (NASDAQ: GRWG), a marijuana stock, will report earnings after the market closes. This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents no change from the year-ago quarter.
Revenues are expected to be $47.26 million, up 117% from the year-ago quarter.
The consensus EPS estimate for the quarter has been revised 4.55% higher over the last 30 days to the current level.
For the last reported quarter, it was expected that GrowGeneration would post earnings of $0.04 per share when it actually produced earnings of $0.06, delivering a surprise of +50%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
The once widely controversial issue of marijuana legalization has been decidedly eclipsed by this year’s divisive presidential race, though voters in five states broadly adopted legalization measures Tuesday. Recreational or medical use, or both, was on the ballot in Arizona, Mississippi, Montana, New Jersey, and South Dakota.
Marijuana legalization in the additional U.S. states is estimated to grow the industry’s size by $9 billion, according to cannabis market firm New Frontier Data.”
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Why the Numbers.....
The company's same-store sales soared 73% year over year, partly propelling GrowGeneration to its 11th consecutive quarter of record revenue. At the same time, its store operating costs as a percentage of sales fell 28% from the prior-year period.
"We are building a best-in-class team of grow professionals, a robust e-commerce platform, and an insight-driven retail footprint targeting both established and emerging markets," GrowGeneration CEO Darren Lampert says. "The results of the recent elections, combined with our proven ability to scale while reducing operational costs, will allow us to grow our revenue and expand our bottom line into the following quarters. We have raised our guidance accordingly."
GrowGeneration's online sales more than doubled year over year. Its commercial division raked in nearly three times more revenue than in the same quarter of 2019. The company's private-label products made more than $1 million in sales in Q3.
GrowGeneration also noted high M&A activity, including the latest agreement to purchase the nation's third-largest chain of hydroponic garden centers, The GrowBiz. This deal will increase GrowGeneration's number of stores to 36. Acquisitions will be key to the company achieving its goal of operating 50 garden centers across 15 states in 2021.
GrowGeneration now anticipates revenue of $185 million to $190 million in full-year 2020, up from its previous guidance of $170 million to $175 million. It also projects 2020 pre-tax net income will be between $9 million and $11 million, compared to a range of $7 million to $8 million provided in its previous outlook.
Next year looks even more promising for the "pick-and-shovel" cannabis stock. GrowGeneration boosted its full-year 2021 revenue guidance to a range of $280 million to $300 million from its previous forecast of revenue between $245 million and $260 million.
GrowGeneration's business development pipeline is more robust than ever. Earlier this month, the company announced plans to acquire The GrowBiz. This deal will increase GrowGeneration's number of stores to 36. Acquisitions will be key to the company achieving its goal of operating 50 garden centers across 15 states in 2021.
The votes in several states to legalize marijuana
should also open up new opportunities for GrowGeneration. CEO Darren Lampert
noted that the "results of the recent elections" were important in
enabling the company to continue growing rapidly.
Will GrowGeneration Shares Continue To Rise?
Are Analysts Correct In Their Assumptions?
What Other Trades Are We Anticipating?
Do You Wish To Be Part Of This Action?
Join us here at Stock Options Made Easy, and find out our trades moving forward.
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!