New Forecasts: Here's What Analysts Think The Future Holds For GrowGeneration Corp. (NASDAQ:GRWG)

GrowGeneration Corp. (NASDAQ:GRWG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the latest consensus from GrowGeneration's seven analysts is for revenues of US$428m in 2021, which would reflect a sizeable 121% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 296% to US$0.48. Previously, the analysts had been modelling revenues of US$355m and earnings per share (EPS) of US$0.43 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for GrowGeneration

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$61.50, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic GrowGeneration analyst has a price target of US$77.00 per share, while the most pessimistic values it at US$45.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GrowGeneration's past performance and to peers in the same industry. It's clear from the latest estimates that GrowGeneration's rate of growth is expected to accelerate meaningfully, with the forecast 121% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 66% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GrowGeneration to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at GrowGeneration.

Analysts are clearly in love with GrowGeneration at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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