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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Growgeneration Corp. (XNAS:GRWG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GRWG
Name:
GrowGeneration Corp. (XNAS:GRWG)
Sector:
- 6673.00K
Industry:
Home Improvement Retail
CEO:
Mr. Darren Lampert
Total Employees:
634
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 111.19% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GROWGENERATION CORP.(GRWG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HOME IMPROVEMENT RETAIL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
4.39
One Month Price Target:
$4.47
Six Month Price Target :
$4.84
Likely Price in One Year's Time:
Ticker:
$5.29
Likely Trading Range Today Under (Normal Volatility)
$4.35
Price Upper limit ($) :
$4.44
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$3.85
This week:
$3.19
This month :
$1.98
Other Primary facts
Market Cap:
262.63M
Market Cap Classification:
Micro Cap
Number of Shares
IPO Date:
60.79M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
42.69%
-22.74%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$6.89
$5.73
$1.89
$3.05
Medium risk (<10%) entry points
Buy Call
Sell Call
$5.36
Buy Put:
Sell Put:
$5.11
$3.42
$3.67
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GRWG
Sharpe Ratio:
2.71%
Comparison:
GRWG, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -17.52% lower than the industry
& ratio is 18.83% higher than the market/S&P 500 average
Average Returns/Yield of
GRWG
Daily returns:
0.17%
Weekly returns:
0.86%
Monthly returns:
3.46%
Yearly returns:
28.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is 45.21% above industry average
Classification:
GRWG, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.68
Statistical test of Returns:
GRWG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
6.06%
Weekly Volatility:
13.54%
Monthly Volatility:
27.08%
Yearly Volatility:
93.81%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.37%
Volatility in last five trading days has been -60.80% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-12.26%
Weekly VaR:
-27.42%
Monthly VaR:
-54.84%
How Much Can the price of
GRWG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-47%
Worst case (decline):
>85%
This translates to price declining to:
$2.35
This translates to price declining to:
$0.66
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
GRWG is a 287.09% riskier investment compared to the market/S&P 500 & is 231.62% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 73.81% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GRWG
Beta in relation to market/S&P 500--3.07
Expected beta in 1 year's time:
1.697
Expected beta in 3 year's time:
2.4
Unlevered (debt free) Beta:
10.818
Beta in relation to Nasdaq (XNAS):
1.678
Beta in relation to all global stocks::
0.931
Beta Comparison & Analysis
Beta of competitors/peers::
1.228
Beta is 149.76% higher than peers
Average Industry Beta:
1.77
Beta is 73.21% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.24%
Sustainable growth rate is -99.89% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.173
Alpha is 30.40% above industry average alpha yield
Alpha is 1103% higher than market/& is unsustainably high
Analysis of Cost of Capital of
GRWG
Equity cost of capital:
0.242
Equity cost of capital is 58.11% above industry mean WACC
Unlevered (without debt) cost of capital:
85.22%
Before-tax cost of debt:
0.04%
After-tax cost of debt:
0.03%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.03%
WACC is 107.95% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$6.81
Revenue growth rate per share of (3Y):
0.72
Annual revenue growth rate is 240.66% above the industry average
EPS:
$0.02
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
-
-
Debt per share
$0.66
EBITDA per share
$0.26
Valuation Analysis Today of
GRWG
P/E Ratio:
187.73
P/E Ratio of Competitors/Peers:
42.43
P/E ratio is 342.44% higher than main peers & is 637.06% higher than the industry
Stock price/value with industry average P/E ratio: $0.51
GRWG is 761.80% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.64
Price to sales ratio is -70.72% below the industry mean
P/B (Price to book value ratio):
0.72
-
-
Net income growth rate (3Y):
-239.80%
Net income growth rate is -275.63% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
10.73%
Net debt to equity ratio:
0.13%
Debt to assets ratio:
8.88%
Net debt to assets ratio:
0.11%
Debt-to-asset ratio is -89.81% below industry average
Ability to repay debt:
Interest coverage ratio:
789.45
Interest coverage ratio is 269.17% more than industry average
Looking forward:
Debt growth rate:
1514.29%
Annual debt growth is 222% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.06%
Analysis of Key Statistics
Correlation of price movement with the market:
0.431
Statistical significance of correlation:
GRWG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.656
Stock price is -34.27% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.656
Correlation of price movement with Nasdaq (^IXIC):
-0.093
Covariance of price movement with the market:
-0.328
Kurtosis
4.447
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.771
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
GRWG
Gross Profit Margin Ratio:
110%
Operating Profit Margin Ratio:
0.01%
Operating profit margin is -99.87% lower than the industry
Net Profit Margin Ratio:
110%
Effective Tax Rate:
767.92%
Effective tax rate is 3246.27% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-1.29%
Return on equity (ROE) is -100.02% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-1.07%
Return on assets (ROA) is -107.85% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
5.31
Current ratio is 210.48% above industry average
Cash Conversion Cycle (days):
15.8
Cash conversion cycle is -78.23% below industry average
The remaining useful life of property plant & equipment is: 4.1 years
Stock based compensation to net income ratio:
-33.05%
In-depth Efficiency Analysis
Revenue generated per employee:
653.4K
Each employee generates 37% more revenue than industry average revenue per employee
EBITDA generated per employee:
24.9K
Each employee generates -51% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 7.6K
Each employee generates -129% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 10.5K
Each employee generates -3138% less free cash flow than industry average revenue per employee
Assets/Capital per employee
402.0K
Each employee generates -3138% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
GRWG
DREAM FINDERS HOMES, INC. (XNAS:DFH)
BAOZUN INC. (XNAS:BZUN)
WW International, Inc. (XNAS:WW)
THE ODP CORPORATION (XNAS:ODP)
Niu Technologies (XNAS:NIU)
MONRO, INC. (XNAS:MNRO)
MAKEMYTRIP LIMITED (XNAS:MMYT)
BLOOMIN' BRANDS, INC. (XNAS:BLMN)
RUSH ENTERPRISES, INC. (XNAS:RUSHB)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
414.23M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
299.23M
115.01M
-
-
43.82M
-
71.14M
114.96M
484.00K
20.00K
15.05M
15.79M
45.00K
- 4789.00K
717.00K
5.51M
- 4789.00K
Statement of Cash Flow
Date:
Period:
4.51M
Differed Income Tax :
- 1636.00K
Stock Based Compensation :
1.58M
Change in Working Capital :
- 1498.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
- 2222.00K
Investments in PP&E:
- 4451.00K
Net Acquisitions:
- 6806.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
47.27M
19.04M
66.31M
7.39M
105.94M
14.86M
194.49M
72.77M
132.50M
48.79M
-
-
807.00K
254.86M
-
449.35M
14.22M
7.83M
5.86M
7.19M
7.37M
36.62M
39.92M
-
40.64M
-
77.26M
61.00K
4.97M
-
367.06M
March 31, 2022 at 6:00:00 AM
414.19M
372.09M
449.35M
-
47.75M
481.0K
20.76M
-
9.50M
- 23.00K
5.75M
-
-
- 7105.00K
- 1378.00K
-
-
47.27M
-
- 2222.00K
- 4451.00K
- 6673.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
GRWG
2023
2024
2025
2026
2027
$4.46
$5.38
$6.48
$7.82
$9.43