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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3820
Positioning
Market Dominance
Retail Trade
Retail
$112M
Darren Lampert
GrowGeneration Corp. owns and operates retail hydroponic and organic gardening stores in the United States. As of March 01, 2022, it operated a chain of 63 stores, which includes 23 in California, 8 in Colorado, 7 in Michigan, 5 in Maine, 6 in Oklahoma, 4 in Oregon, 3 in Washington, 2 in Nevada, and 1 in New Mexico.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = GRWG ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$ARCO Arcos Dorados Holdings Inc. | 73 | 85 | 89 | 65 | - | - | 29.1% | 5.1% | 46.8% | 7.3% | 3.3% | 3.2% | 3.4% | 153.0x | $1.5B | VS | |
$IMKTA INGLES MARKETS INC | 70 | 73 | 89 | 76 | 11.3x | 4.1x | 5.3% | 3.3% | 23.9% | 2.2% | 1.6% | -5.4% | 1.0% | 32.0x | $1.3B | VS | |
$SGU STAR GROUP, L.P. | 69 | 82 | 79 | 63 | - | - | 26.2% | 7.8% | 31.5% | 6.4% | 4.1% | 1.0% | 6.1% | 63.0x | $399M | VS | |
$EZPW EZCORP INC | 68 | 77 | 82 | 89 | 7.2x | 4.2x | 12.0% | 6.4% | 58.6% | 11.7% | 8.6% | 9.7% | 0.0% | 51.0x | $1.2B | VS | |
$HTHT H World Group Ltd | 68 | 91 | 44 | 84 | - | - | 24.9% | 4.9% | 100.0% | 21.8% | 13.0% | 6.2% | 2.9% | 45.0x | $101.1B | VS | |
$DDL Dingdong (Cayman) Ltd | 68 | 86 | 82 | 57 | - | - | 42.4% | 4.0% | 100.0% | 0.9% | 1.3% | 12.3% | 0.0% | 201.0x | $1.2B | VS | |
$SBH Sally Beauty Holdings, Inc. | 68 | 83 | 92 | 77 | 5.1x | 2.3x | 27.5% | 6.9% | 51.6% | 8.9% | 5.3% | -0.4% | 0.0% | 177.0x | $1.6B | VS | |
$SPH SUBURBAN PROPANE PARTNERS LP | 67 | 80 | 90 | 53 | - | 13.0x | 18.6% | 4.7% | 60.7% | 14.4% | 7.4% | 7.9% | 7.1% | 202.0x | $1.2B | VS | |
$IHG INTERCONTINENTAL HOTELS GROUP PLC /NEW/ | 67 | 63 | 81 | 67 | - | - | -29.5% | 13.1% | 58.6% | 40.7% | 27.4% | 6.8% | 1.3% | - | $21.5B | VS | |
$ROST ROSS STORES, INC. | 67 | 63 | 55 | 83 | 25.2x | 16.5x | 34.8% | 13.3% | 28.0% | 11.6% | 9.1% | 10.4% | 1.0% | 26.0x | $51.6B | VS | |
$GRWG GrowGeneration Corp. | 38 | 37 | 40 | 35 | - | - | -26.8% | -17.6% | 26.1% | -17.7% | -16.5% | -11.7% | 0.0% | 52.0x | $112M | ||
| SECTOR BENCH | - | - | - | - | - | 21.4x | 9.1x | 8.9% | 2.9% | 36.2% | 3.9% | 1.6% | 3.8% | 0.0% | 0.6x | - | REF |
GrowGeneration Corp. (GRWG) receives a "Avoid" rating with a composite score of 37.7/100. It ranks #3820 out of 7,333 stocks in our coverage universe and carries a 1-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Darren Lampert
Chief Executive Officer
Labor Force
690
37
33
35
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for GRWG
Lagging peers — losers tend to keep underperforming
Fair valuation relative to peers
Average quality profile
High volatility — wider range of outcomes increases timing risk
Aggressive spending — empire-building risk, dilutive growth
Below-average composite — caution warranted
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Relative valuation derived from Retail Trade sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for GRWG.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 37 | 26 | +11ALPHA |
| MOMENTUM | 35 | 31 | +4NEUTRAL |
| VALUATION | 40 | 38 | +2NEUTRAL |
| INVESTMENT | 33 | 50 | -17DRAG |
| STABILITY | 35 | 34 | +1NEUTRAL |
| SHORT INT | 44 | 43 | +1NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy -26.8% (sector 8.9%)
GM 26% vs sector 36%, OM -18% vs sector 4%
Capital turnover N/A
Rev growth -12%, 10yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Our quantitative model flags GrowGeneration Corp. with an Avoid rating, assigning a composite score of 37.7/100 and 1 out of 5 stars. Ranked #3820 of 7,333 stocks, GRWG falls in the bottom tier across key factors. Historically, stocks with this profile have faced elevated risk of underperformance and capital loss.
GRWG's quality score of 37/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -26.8% (sector avg: 8.9%), gross margins of 26.1% (sector avg: 36.2%), net margins of -16.5% (sector avg: 1.6%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 40/100, GRWG appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/B ratio of 0.63x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
GrowGeneration Corp.'s investment score of 33/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -11.7% vs. a sector average of 3.8% and a return on assets of -17.6% (sector: 2.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
GRWG is currently showing below-average momentum at 35/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at -11.7% year-over-year, while a beta of 0.90 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
GRWG's stability score of 35/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 0.90 and a debt-to-equity ratio of 52.00x (sector avg: 0.6x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
The short interest score of 44/100 for GRWG suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 52.00x), micro-cap liquidity risk. With a $112M market cap (micro-cap), GrowGeneration Corp. may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
GrowGeneration Corp. is a micro-cap company in the Retail Trade sector, ranked #0 of 50 in its sector (100th percentile) and #3820 of 7,333 overall (48th percentile). Key comparisons include ROE of -26.8% trailing the 8.9% sector median and operating margins of -17.7% below the 3.9% sector average. This top-quartile standing reflects exceptional competitive strength relative to Retail Trade peers.
While GRWG currently exhibits a AVOID profile, superior opportunities exist within the RETAIL TRADE sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Retail Trade Alpha →Quant Factor Profile
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Improvement in Investment (33) would have the largest impact on the composite score.
ROE 401% BELOW SECTOR MEDIAN
Gross Margin 28% BELOW SECTOR MEDIAN
Op. Margin 552% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate GrowGeneration Corp. (GRWG) as Avoid with a composite score of 37.7/100 at a current price of $1.12. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.
The rating is primarily driven by strength in value (40th percentile) and quality (37th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (33th percentile) and stability (35th percentile) tempers our overall conviction. We assign a No Moat rating (17/100), High uncertainty, and Poor capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
GrowGeneration Corp. holds a top-quartile position (#0 of 50) within the Retail Trade sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 37.7/100 places it at rank #3820 in our full 7,333-stock universe. At $112M in market capitalization, GrowGeneration Corp. is a small-cap player in the Retail Trade space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -12% combined with momentum at the 35th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 26% (-10.1pp vs sector) narrow to operating margins of -18% (-21.6pp vs sector) and net margins of -16.5%, yielding a gross-to-net conversion rate of -63%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $1.12, GrowGeneration Corp. is trading near fair value based on current fundamentals. Our value factor score of 40/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at P/B of 0.6x, P/S of 0.4x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
The stock may offer contrarian value if near-term headwinds prove transitory — the current weakness in factor scores may reverse if business fundamentals stabilize.
The Avoid rating (composite 37.7/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Revenue decline of -12% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
Thin net margins of -16.5% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
Weak momentum (35th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
We assign a High uncertainty rating to GrowGeneration Corp.. Key risk factors include current negative profitability (net margin -16.5%), below-average price stability (35th percentile), the combination of leverage (52% D/E) and thin margins (-16.5% net) amplifies downside risk. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.
Specific risk factors that inform our assessment include: current negative profitability (net margin -16.5%); below-average price stability (35th percentile); the combination of leverage (52% D/E) and thin margins (-16.5% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 35th percentile and quality factor at the 37th percentile provide a quantitative summary of the overall risk landscape.
We identify limited risk mitigants at this time, which contributes to our high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.
We rate GrowGeneration Corp.'s capital allocation as Poor. Key concerns include low returns on equity (-26.8%), negative profitability, weak asset returns (ROA -17.6%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — GrowGeneration Corp. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, GrowGeneration Corp. receives a Avoid rating with a composite score of 37.7/100 (rank #3820 of 7,333). Our quantitative framework assigns a No Moat (17/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 36/100.
Our analysis does not support a constructive view on GrowGeneration Corp. at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign GrowGeneration Corp. a meaningful economic moat, scoring 17/100 on our composite assessment. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, margin superiority, reached only 7.3/20.
The strongest moat sources are margin superiority (7.3/20) and financial resilience (5.2/20). GM 26% vs sector 36%, OM -18% vs sector 4%. Interest coverage N/A. These pillars form the core of GrowGeneration Corp.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0/20) and economic value creation (0.1/20). Capital turnover N/A. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect GrowGeneration Corp.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include declining revenues (-12%) that pressure the earnings outlook. The margin cascade from 26% gross to -18% operating to -16.5% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality raises some durability concerns, with the quality factor at the 37th percentile.
The margin profile shows gross margins of 26%, operating margins of -18%, net margins of -16.5%. Return metrics include ROE of -26.8% and ROA of -17.6%. Relative to the Retail Trade sector, gross margins are 10.1 percentage points below the sector median of 36%, and ROE of -26.8% compares to a sector median of 8.9%.
The balance sheet reflects moderate leverage with D/E of 52%, revenue growth of -12%. The sector median D/E is 1%, putting GrowGeneration Corp. at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
Unfortunately for some shareholders, the GrowGeneration Corp. ( NASDAQ:GRWG ) share price has dived 25% in the last...
DENVER, Feb. 04, 2026 (GLOBE NEWSWIRE) -- GrowGeneration Corp. (NASDAQ: GRWG) (“GrowGen” or the “Company”), one of the nation’s largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and retail garden centers, today announced that it will host an exhibit at the Indoor Ag-Con 2026 Conference, taking place February 11–12, 2026, in Las Vegas, Nevada. Details are included below: Indoor Ag-Con 2026Date: February 11–12, 2026Location: Westgate Las
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