7 Best Vertical Farming and Hydroponic Stocks to Buy

3. GrowGeneration Corp. (NASDAQ:GRWG)

Number of Hedge Fund Holders: 6

GrowGeneration Corp. (NASDAQ:GRWG) is a leading developer, marketer, retailer, and distributor of products for both indoor and outdoor hydroponic and organic gardening, along with customized storage solutions. The company offers a wide range of products, including nutrients, additives, growing media, lighting, and environmental control systems. Founded in Colorado in 2014, the company has grown into the largest chain of specialty hydroponic and organic garden centers in the U.S.

In Q2 2024, GrowGeneration Corp. (NASDAQ:GRWG) reported net revenue of $53.5 million, up 11.8% sequentially but down 16.3% YoY due to store closures. Same-store sales dipped 6.2%, driven by weaker e-commerce and retail volumes. However, proprietary brand sales were a highlight, contributing 21.5% to total sales, up from 16.7% last year, fueled by strong demand for Drip Hydro and Charcoir products.

Gross margins improved to 27%, reflecting better operational efficiency, though pricing pressure and higher freight costs limited the gains. The company posted a net loss of $5.9 million, primarily due to restructuring expenses related to store closures and reduced sales in the Storage Solutions segment.

Liquidity remained strong for GrowGeneration Corp. (NASDAQ:GRWG), with $56 million in cash supporting a $4.2 million stock repurchase program. Looking forward, the company is optimistic about its restructuring efforts, aiming for sustainable revenue growth and profitability by expanding its proprietary brand portfolio and digital sales platform.

In July 2024, the company announced the planned closure of an additional 12 redundant or underperforming stores in the second half of 2024 as part of a strategic restructuring plan, following which the company would have a total of 31 retail stores operating in its portfolio.

The stock surged by nearly 6% in the past month, possibly driven by insider confidence, as the company director’s purchase of shares signaled optimism about prospects. However, a 17% YTD decline is largely due to restructuring costs from store closures and operational adjustments.

As of Q2 2024, six hedge funds, holding a combined investment of $3.1 million, are bullish on the stock, according to Insider Monkey’s database. Thus, GRWG makes it to our list of the best agriculture stocks to buy now.