One stock that exploded higher during the past week is Growlife Inc (OTCMKTS:PHOT). The pot space caught some air, and one might attribute that to the rebound in the space. But we would also note that the company just announced financial results for the period ending September 30, 2019.
According to the release, “The company experienced growth over last year, showing an 141% increase in revenue over Q3 2018, from $1.0 million to over $2.3 million in Q3 2019. Additionally, the company continued to make significant progress in improving profitability, reporting $746,000 in gross profit for the three month period ending September 30, 2019, a 1,256% increase over the same period last year. This was due to a major shift in profit margins, which increased to 32.4% in Q3 2019 compared to just 5.8% in Q3 2018.”
Growlife Inc (OTCMKTS:PHOT) promulgates itself as a company that provides farming soil, hydroponics equipment, organic plant nutrients, and other products to specialty grow operations in the United States.
Its hydroponics equipment include indoor lighting systems, growing mediums and accessories, tools for cutting and propagation, hydroponics systems, bulbs, ballasts, reflectors, meters and timers, and climate control equipment for the indoor plant cultivation and cannabis industries.
The company distributes and sells its products through its e-commerce distribution channel, such as GrowLifeEco.com, as well as retail storefronts. GrowLife, Inc. is headquartered in Kirkland, Washington.
According to company materials, “GrowLife, Inc. (PHOT) aims to become the nation’s largest cultivation service provider for cultivating organics, herbs and greens and plant-based medicines. Our mission is to help make our customers successful. Through a network of local representatives covering the United States and Canada, regional centers and its e-Commerce team, GrowLife provides essential goods and services including media, industry-leading hydroponics and soil, plant nutrients, and thousands more products to specialty grow operations. GrowLife is headquartered in Kirkland, Washington and was founded in 2012.”
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As noted above, PHOT just announced financial results for the period ending September 30, 2019, where it showed net revenue of $2.3 million as compared to revenue of $1.0 million, an increase of 141%.
Traders will note 130% added to share values of the stock over the past week of action. Moreover, the stock has seen interest climb, with an increase in recent trading volume of approaching 230% over what the stock has registered over the longer term.
GrowLife CEO Marco Hegyi stated “In our toughest seasonal quarter, I see Q3 as a good quarter for GrowLife for three reasons: First, we achieved our highest revenues of the year so far by growing over 141% over last year same period. The summer quarter is usually challenging for GrowLife but demand for both GrowLife and EZ CLONE products remains strong. Second, gross margins remain strong at over 32.4% wherein the three quarters of 2019 we generated almost three times as much gross margin dollars as we have in all of the last three years combined. We are not stopping there. We eliminated low performing business areas such as retail hydroponics and flooring, this is expected to and lower our monthly spending by up to $100,000 per month. And three, we are utilizing the increased gross margin and savings to invest in our announced plans for 2020 of providing hemp CBD clones under the EZ CLONE brand are intended to serve the high-demand CBD market. We believe this may lead to even greater growth for the Company.”
Now commanding a market cap of $20M, PHOT has a store ($201K) of cash on the books, which is balanced by about $6.8M in total current liabilities. PHOT is pulling in trailing 12-month revenues of $8.4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 141%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $PHOT stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $PHOT, either long or short, and we have not been compensated for this article.