urban-gro, Inc. (UGRO) research, news, and more from GeoInvesting

Company description

Thu, 18 Jul 2024 20:07:05 GMT

urban-gro, Inc. engages in the designing, engineering, building, and integrating complex environmental equipment systems for indoor controlled environment agriculture (CEA) cultivation and retail facilities in the United States, Canada, and Europe. The company provides architectural design, engineering, and construction services comprising pre-construction, cultivation space programming (CSP), architectural and interior design, engineering, integrated cultivation design, owner's representative/construction management, and general contracting services; and maintenance, training, and support services. It also offers facility and equipment commissioning services; gro-care crop and asset protection services, including training services, equipment maintenance services, asset protection program, and an interactive online operating support system for gro-care and client document delivery and project management; and property condition assessment services. In addition, the company provides integrated equipment systems solutions, such as design, source, and integration of complex environmental equipment systems comprising heating, ventilation, and air conditioning solutions, as well as environmental control, fertigation, irrigation distribution, water treatment, and wastewater reclamation systems; and commercial horticulture lighting solutions, rolling and automated container benching systems, specialty fans, microbial mitigation, and odor reduction systems. Further, it offers value-Added Reselling (VAR) of cultivation equipment systems; and strategic vendor relationships with premier manufacturers. It primarily markets and sells its solutions to clients in the CEA that includes operators and facilitators in the cannabis and produce markets; and commercial sectors comprising food and beverage consumer packaged goods companies, healthcare, higher education, and hospitality. urban-gro, Inc. was founded in 2014 and is based in Lafayette, Colorado.

Research

Wed, 17 Aug 2022 04:00:00 GMT

Urban-gro, Inc. (NASDAQ:UGRO) ($11.67; $125.5M market cap) a fully integrated architectural, engineering and cultivation systems integration company for commercial cannabis and food-focused Controlled Environment Agriculture facilities announced Q2 2022 results:

Sales of $16.3 million vs $12.8 million in the prior year, and below analyst estimates of $19.2 million
Net loss of $0.17 vs EPS of $0.02 in the prior year and missing analyst estimates of a loss of $0.10

We have decided to move on from UGRO and remove it from our Select Longs Model Portfolio as we continue to place an emphasis on favoring companies that are making money or are very close to achieving profitability.

When we first came across the company, it had actually turned profitable, and we chose to write a Reasons For Tracking (RFT) piece on it based on strong Q2 results a year ago. However, the company has generally not been able to maintain profitability. And given the headwinds it seems to be facing, we don’t think that’s going to change any time soon:

“As a result of the dynamic macroeconomic environment, whereby inflation, supply chain issues and oversupply issues in the U.S. cannabis market are actively pressuring customers’ capital spending plans, the Company believes it is prudent to withdraw its previously announced full year 2022 revenue and Adjusted EBITDA guidance, and diligently keep investors informed of significant backlog additions in the months and quarters ahead.”

With an August 16, 2021 Select Long open price of $11.29, current price of $5.21 and high price of $17.30, its final return of -53.86% is a mirror image of the peak of 53.19% it attained while tenured in the portfolio for a year.

Research

Wed, 30 Mar 2022 14:40:55 GMT

Sales of $19.0 million vs $9.2 million in the prior year, in line with analyst estimates of $18.8 million
Net loss of $0.06 vs net loss of $0.24 in the prior year, missing analyst estimates of a loss of $0.04

“We generated our sixth consecutive quarter of positive Adjusted EBITDA in fourth quarter 2021, reflecting our ongoing commitment to grow in a profitable and cash generative manner. We enter 2022 with a strong balance sheet containing approximately $35 million of cash and no debt, giving us immense flexibility to execute on inorganic growth opportunities. We remain laser-focused on building shareholder value and returned approximately $5 million of cash to shareholders through our stock buyback program in 2021, which we also further increased earlier in 2022.”

Guidance for 2022:

2022 full year revenue guidance of greater than $110 million, above analyst estimates of $93.8 million
2022 full year Adjusted EBITDA guidance of greater than $5 million; in line with analyst estimates of $4.9 million
Guidance on the conference call suggests Q1 2022 revenue will be more like Q4 2021, current analyst estimates are for $19.9 million, implying the company may miss that mark.

Research

Wed, 10 Nov 2021 16:08:00 GMT

Urban-gro, Inc. (NASDAQ:UGRO) ($13.36; $140.4M market cap) a fully integrated architectural, engineering and cultivation systems integration company for commercial cannabis and food-focused Controlled Environment Agriculture facilities. The company reported Q3 2021 results:

Sales of $18.3 million vs $8.3 million in the prior year, in line with analyst estimates of $18.4 million
EPS of $0.00 vs a loss of $0.14 in the prior year, but below analyst estimates of $0.09
Raised full year revenue guidance to more than $60 million from prior range of $54 to $59 million
Lowered 2021 full year adjusted EBITDA guidance to greater than $2.5 million, compared to a prior range of $4 to $5 million, to account for incremental strategic investments in growth

“I am very excited about what the future holds for urban-gro as we further expand upon our integrated service model by executing on accretive and synergistic acquisitions, investing in the European indoor CEA market, and adding key capabilities in people and resources to meet customer demand. I am thrilled with the progression of our 2WR+ acquisition, which has immediately delivered the synergies we envisioned. Further, the recent launch of our urban-gro Financial Services division is yet another tool to service our customers in a holistic manner while proactively breaking down barriers to help accelerate market growth.

We have been allocating significant resources towards our European initiative this year and I am thrilled to deliver our first large contract in the region with Urban Health Farms – a food-focused CEA leader with a strategy to expand its footprint across Europe.

We are extremely pleased with our third quarter financial performance, which marks our fifth consecutive quarter of positive adjusted EBITDA, which remains as a key financial objective for us as we grow. Our business is in a strong position with a flexible capital structure, reflected by our balance sheet that contains more than $40 million in cash and no debt. We are poised for continued growth and are investing into the further buildout of our solution platforms.”

For more on UGRO, see our reasons for tracking note from August 2021.

Research

Sun, 24 Oct 2021 04:00:00 GMT

Urban-gro, Inc. (NASDAQ:UGRO) a fully integrated architectural, engineering and cultivation systems integration company for commercial cannabis and food-focused Controlled Environment Agriculture announced that the company was party to an unauthorized third party fraudulent wire transfer where apporziatlemy $5.1 million was taken from the company’s bank account.

$2.1 million was in the process of being recovered and the company expects the bank to reimburse the remaining balance.

Reasons For Tracking

Mon, 16 Aug 2021 13:25:48 GMT

Our Reasons For Tracking UGRO

Urban-gro, Inc. (NASDAQ:UGRO) a fully integrated architectural, engineering and cultivation systems integration company for commercial cannabis and food-focused Controlled Environment Agriculture (“CEA”) facilities has entered our radar due to several factors. The company basically helps grow houses optimize their operations. Today we are adding UGRO to our Selected Long Disclosure Model Portfolio on strong Q2 results.

1. On August 11, 2021 the company announced Q2 2021 results:

Record Q2 2021 sales of $12.8 vs $4.0 million in the prior year
Record Adjusted EBITDA of $0.6 million in Q2 2021 compared to $0.5 million in Q1 2021 and a negative ($0.3) million in Q2 2020
Achieved profitability for first time in the company’s history with Non-GAAP EPS of $0.046 vs. a loss of $0.25 in the prior year
Generating strong cash flow for the first 6 months of 2021, or $1.3 million

Management commentary:

“I am excited that we achieved positive net income for the first time in our company’s 8-year history. Our backlog of signed contracts continues to build, which demonstrates a strong runway for the 2nd half of the year. With the completed acquisition of MJ12 Design Studio which now establishes urban-gro as the only fully integrated architectural, engineering and cultivation systems integration company in the industry, we anticipate that the incremental projects and cross-selling opportunities will drive further high margin revenues and profits to the business...

...urban-gro is in the strongest position in its history to provide customers with the expertise and speed to market required in a quickly evolving and expanding global marketplace. I am thrilled with the depth and breadth of our teams, and I believe that the accretive addition of the MJ12 Design Studio team strengthens that further.

2. Favorable capital structure

Only 11.7 million shares outstanding ( 7.2 million float)
Strong balance sheet
$50.4 million in cash
No debt

3. Guidance and record backlog implies strong growth will continue

2021 full year revenue guidance of $54 to $59 million vs $25.8 million in 2020
2021 full year Adjusted EBITDA guidance of $4 to $5 million vs. a loss of $0.7 million in 2020.

4. Company has been buying back stock as it feels it is undervalued

...With a solid balance sheet representing a strong liquid cash position and no debt as well as trailing twelve months revenue of $42 million, we are extremely pleased to see our 2nd consecutive quarter of positive income from operations and to achieve profitability for the first time. Given these factors and our continued momentum, we believe strongly in the current and future value of our company and have repurchased approximately 400,000 of our shares through the end of Q2 2021 at an average price of approximately $8.63.”

5. Recent accretive acquisition will help boost already strong growth momentum

6. Insiders have high ownership stake (32%)

7. Valuation: Trading an EV/S of 1.53 which is substantially less than comps that are losing money

Initial Caveats:

Have not interviewed management
Not cheap on a P/E basis