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    GrowGeneration Corp.'s (NASDAQ:GRWG) 30% Price Boost Is Out Of Tune With Revenues

    Simply Wall St·12/17/2025 10:29:30
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    GrowGeneration Corp. (NASDAQ:GRWG) shareholders have had their patience rewarded with a 30% share price jump in the last month. Looking further back, the 25% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.

    Even after such a large jump in price, you could still be forgiven for feeling indifferent about GrowGeneration's P/S ratio of 0.8x, since the median price-to-sales (or "P/S") ratio for the Specialty Retail industry in the United States is also close to 0.5x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

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    Check out our latest analysis for GrowGeneration

    ps-multiple-vs-industry
    NasdaqCM:GRWG Price to Sales Ratio vs Industry December 17th 2025

    What Does GrowGeneration's Recent Performance Look Like?

    GrowGeneration hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. One possibility is that the P/S ratio is moderate because investors think this poor revenue performance will turn around. You'd really hope so, otherwise you're paying a relatively elevated price for a company with this sort of growth profile.

    Want the full picture on analyst estimates for the company? Then our free report on GrowGeneration will help you uncover what's on the horizon.

    Do Revenue Forecasts Match The P/S Ratio?

    There's an inherent assumption that a company should be matching the industry for P/S ratios like GrowGeneration's to be considered reasonable.

    In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 20%. As a result, revenue from three years ago have also fallen 49% overall. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

    Shifting to the future, estimates from the three analysts covering the company suggest revenue should grow by 4.6% over the next year. Meanwhile, the rest of the industry is forecast to expand by 7.8%, which is noticeably more attractive.

    In light of this, it's curious that GrowGeneration's P/S sits in line with the majority of other companies. Apparently many investors in the company are less bearish than analysts indicate and aren't willing to let go of their stock right now. Maintaining these prices will be difficult to achieve as this level of revenue growth is likely to weigh down the shares eventually.

    The Bottom Line On GrowGeneration's P/S

    GrowGeneration's stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

    When you consider that GrowGeneration's revenue growth estimates are fairly muted compared to the broader industry, it's easy to see why we consider it unexpected to be trading at its current P/S ratio. At present, we aren't confident in the P/S as the predicted future revenues aren't likely to support a more positive sentiment for long. A positive change is needed in order to justify the current price-to-sales ratio.

    You need to take note of risks, for example - GrowGeneration has 2 warning signs (and 1 which is a bit concerning) we think you should know about.

    If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.