Last May we asked, “Is Urban-Gro the Most Undervalued Cannabis Play in the Market?” Looks like it was, having doubled less than four months later!
After some rocky post secondary offering trading, (where they raised $64 million at $10 per share), we had to make the call, when it stumbled to $7.50. For no apparent reason.
As we felt it might, urban-gro went back to its offering price, and then just kept going, up 126% at its recent high of $17.
While it may longer be “the” most undervalued play, in our opinion it is indeed undervalued.
The basis of that call isn’t the due to recently reported record second quarter of $12 million – an increase of $8.8 million, or 220%.
The basis of the call is $50 million in the bank, yet to be deployed. It’s a formidable war-chest to acquire complimentary companies, that haven’t been able to raise money in the equity markets – as easily as they could have two years ago when the sector was hot.
The only acquisition they have announced was MJ12 Design Studio which transformed urban-gro into a “Fully Integrated Indoor Cultivation Powerhouse.” It was a doozy.
As it is, urban-gro already had the reputation of being the top-rated engineering for to build indoor hydroponic facilities. This makes urban’s acquisition targets much easier to identify. They are coming to urban-gro, not the other way around.
The Company also recently gave 2021 full year revenue guidance of $54 to $59 million. With adjusted EBITDA guidance of $4 to $5 million!
Three years from now urban-gro could be a major player, as the overall market for hydroponics is just getting underway.
Stay tuned for more.
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