DENVER - GrowGeneration Corp. (NASDAQ: NASDAQ:GRWG), a prominent U.S. retailer and distributor of specialty hydroponic and organic gardening products, today revealed the initiation of its inaugural share repurchase program. The company's Board of Directors has approved a plan to buy back up to $6 million of its outstanding common stock.
The repurchase program is set to begin on April 1 and may extend for up to one year. The company clarified that the repurchases would be conducted on the open market, subject to stock price, trading volume, market conditions, and regulatory considerations. GrowGeneration pointed out that while the program is in place, there is no mandated obligation to repurchase any specific number of shares, and the program can be halted or terminated at any time.
Darren Lampert, Co-Founder and CEO of GrowGeneration, expressed confidence in the company's business fundamentals and described the share repurchase as an element of their strategy to enhance shareholder value. Lampert emphasized that the company's shares are currently undervalued and that the repurchase program complements other potential uses of their robust balance sheet, which includes brand reinvestment, strategic acquisitions, and stock repurchases.
GrowGeneration, founded in Colorado in 2014, has established itself as the largest chain of specialty retail hydroponic and organic garden centers across the United States. With a diverse product range that includes nutrients, lighting, and environmental control systems, the company caters to both indoor and outdoor gardening enthusiasts.
GrowGeneration also operates an e-commerce platform and engages in wholesale distribution through HRG Distribution, in addition to providing storage solutions via Mobile Media or MMI.
This announcement is based on a press release issued by GrowGeneration Corp.
InvestingPro Insights
In the wake of GrowGeneration Corp.'s (NASDAQ: GRWG) announcement to initiate a share repurchase program, investors may find the following insights from InvestingPro valuable for their portfolio decisions. With a market capitalization of $157.45 million, the company's financial stability is reflected in its balance sheet, which holds more cash than debt, as per an InvestingPro Tip. This could be a reassuring factor for shareholders considering the company's buyback strategy.
Despite the company's robust balance sheet, GrowGeneration's stock price has experienced significant volatility, another key point highlighted by InvestingPro Tips. Over the last week, the stock has seen a notable return of 11.5%, indicating a potential uptick in investor confidence which may be timely with the repurchase plan. However, it's worth noting that analysts do not anticipate the company will turn a profit this year, and the stock has not been profitable over the last twelve months.
From a valuation standpoint, GrowGeneration's P/E ratio stands at -3.28, with an adjusted P/E ratio for the last twelve months as of Q4 2023 at -4.15. The company's price to book ratio during the same period is 0.79, which could suggest that the stock is reasonably valued in relation to its assets. Furthermore, the company does not pay a dividend to shareholders, which aligns with the strategy of reinvesting in the business and repurchasing shares.
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