LAFAYETTE, CO - urban-gro, Inc. (NASDAQ:UGRO), a company specializing in professional services and Design-Build solutions for the Controlled Environment Agriculture (CEA) and commercial sectors, has secured multiple contracts in the cannabis industry.
The contracts, which collectively are valued at approximately $12 million, will provide engineering, architecture, design, equipment procurement, and construction management services for various cultivation and retail dispensary projects.
The company anticipates recognizing the majority of the revenue from these contracts by the end of the third quarter of 2024. Bradley Nattrass, Chairman and CEO of urban-gro, expressed optimism about the growth in the cannabis sector, attributing it to positive legislative developments, including the potential rescheduling of cannabis and the upcoming vote on adult-use cannabis in Florida.
urban-gro has focused on diversifying its strategy and streamlining its operations over the past two years, a period during which the cannabis sector experienced a downturn. The firm believes its professional services team is well-equipped to handle the expected upsurge in demand for its tailored solutions in the cannabis market.
The announcement comes as the cannabis industry is showing signs of recovery, and urban-gro positions itself to capitalize on this momentum. The company's integrated approach, combining professional services with Design-Build capabilities, aims to meet the complex needs of its clients in the CEA and commercial sectors.
This news is based on a press release statement and includes forward-looking statements regarding anticipated demand for the company's services and the potential impact of legislative changes on the sector.
These statements are subject to various risks and uncertainties, and actual results could differ materially from those projected. The company cautions readers not to place undue reliance on these forward-looking statements, which reflect the company's expectations only as of the date of the press release.
In other recent news, urban-gro Inc. has expanded its stock incentive plan by an additional 1.2 million shares, following approval at the company's annual meeting. This move is part of several matters voted on by security holders, including the reelection of all incumbent directors and approval of executive officer compensation.
In a bid to maintain robust accounting and financial reporting practices, urban-gro has appointed Sadler, Gibb & Associates LLC as its new independent registered public accounting firm. This decision received approval from the company's Board of Directors and Audit Committee.
The company's financial performance in the first quarter of 2024 was strong, surpassing its quarterly revenue guidance by $15.5 million and limiting its adjusted EBITDA loss to $0.3 million. Despite a decrease in revenue from the previous year, urban-gro's financial health appears stable, with a strong backlog and a continued focus on returning to positive adjusted EBITDA. The company maintains its full-year revenue guidance of over $84 million.
These are recent developments that reflect urban-gro's strategic financial management and operational efficiencies in the face of industry fluctuations.
InvestingPro Insights
As urban-gro, Inc. (NASDAQ:UGRO) secures substantial contracts in the burgeoning cannabis sector, its current financial health and market performance are critical factors for investors to consider. According to InvestingPro data, urban-gro's market capitalization stands at a modest $15.28 million, reflecting its position within the niche market of Controlled Environment Agriculture (CEA) services.
Investors should note that urban-gro is trading at a low revenue valuation multiple, with its price/book ratio in the last twelve months as of Q1 2024 at 0.82, suggesting the stock may be undervalued relative to its assets. Despite a 12.08% revenue growth over the same period, the company's gross profit margin remains weak at 15.03%, highlighting potential challenges in converting sales into actual profit.
Two critical InvestingPro Tips to consider are that urban-gro has been quickly burning through cash and the stock generally trades with high price volatility. These factors could influence the company's ability to sustain operations and grow in the long term. Additionally, analysts do not anticipate the company will be profitable this year, which may be a concern for potential investors looking for short-term gains.
For those interested in a deeper analysis, InvestingPro offers additional tips on urban-gro, which can be accessed at https://www.investing.com/pro/UGRO. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of investment insights and analysis.
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