With a 2021 IPO sending the stock soaring to 400%, Urban-Gro should definitely be on the minds of every cannabis stock investor. But is Urban-Gro stock a strong buy? Urban-Gro (Nasdaq: UGRO) supports cultivation facilities by performing design, architectural, and engineering services for indoor grows. The company is based in Colorado, USA.
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At Cannin, we tend to favor cannabis ancillary stocks such as Innovative Industrial Properties (IIPR) and Hydrofarm Holdings (HYFM). These stocks tend to have stronger fundamentals than the MSOs and it shows. In fact, both IIPR and HYFM are up 10x since we first recommended them as strong buys. But what makes Urban-Gro a strong buy?
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Urban-Gro is a horizontally integrated engineering firm supporting cultivation companies across the USA. They offer engineering, design, HVAC, procurement, odor control, lighting solutions, air and microbial solutions, and crop management services to food based and cannabis cultivations.
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When we dive deep into the fundamentals of Urban-Gro, we see strong markets with massive expansion opportunities into Europe and the Middle East. Urban-Gro also has strong financials with over $42 million in annual revenues and only 10.5 million in outstanding shares. In addition, the company has about $50 million on hand and a strong debt to equity ratio of 0.05. In fact, 32% of their shares are held by insiders – which is always a promising sign.
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Taking all of this into account, Urban-Gro seems like a promising cannabis stock but is Urban-Gro stock truly a strong buy?
Urban-Gro: Is this Cannabis Stock a Strong Buy?
Urban Gro is a cultivation support company offering design, engineering, lighting, crop management and ongoing crop optimization support for food and cannabis cultivation companies.
They’ve successfully completed over 450 projects in the USA accounting for around 12 million sq ft of cultivation space. In early 2021, they were listed on the Nasdaq exchange and increased over 400% to over $100 before crashing back down to around $8. Since then they’ve increased to the mid teens and currently sit at $13.20.
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They have strong financials currently with NO debt and revenue at $42 million (ttm). They’ve posted 4 consecutive record quarters and have grown to over 80 employees. They are profitable and only have 10.5 million shares outstanding so not much dilution currently.
The management team is experienced in agriculture and publicly traded companies although not so much in cannabis. They don’t have much positive press or news about them but this is not surprising given they aren’t the flashiest company.
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If they can continue executing their business plan, increase revenues, and expand to other markets, this company’s stock price has lots to gain.
For all these reasons we believe UGRO as Strong. If you’re look for more Strong cannabis and hemp companies that would make immediate buy opportunities, head over to the featured companies page on cannin.com.
Urban-Gro: Is this Cannabis Stock a Strong Buy?
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