Grove Inc GRVI Stock Forecast & Analysis

Grove Inc. is an interesting company and not one I would normally focus on, but GRVI Stock might be a solid rounding out for your cannabis investments.  And, I am going to put together a GRVI stock forecast.  First, they are CBD-based instead of the THC-based products I normally focus on.  Grove Inc. is an aggressive company that finds Amazon companies aligned with its strategy and acquires and accelerates growth from that perspective.  It is this strategy that has given the NASDAQ-traded company an edge.

First, Grove Inc. is net earnings positive and has achieved this on not-so-awesome margins.  From there, if Grove Inc. were to scale up revenues even further, it is very possible they could really push GRVI stock much higher.

Grove Inc. Financial Data

Here is a breakdown of Grove Inc’s Q3 financial data.

Grove Inc Gross Profits

Gross margins at 62% are solid and where you would find the best-performing companies. And, should there be continued increases in revenues, gross margins may continue upward somewhat, but there are limitations there.

Nonetheless, revenue increases are expected to hit approximately $50M for 2022 and, already we have printed about $15M in the first two quarters (Grove Inc.’s Q4 is actually in June). This means there are expectations of big increases in revenue over the next two quarters.

Also, moving forward into 2023, expectations are for $65M. Should Grove Inc. hit these numbers, an average of $17.5M per quarter, there will be big gains on a quarterly basis. This will continually drive gross profits higher.

Grove Inc Operating Profits

Whereas gross profits were on very high margins versus revenue, operating costs are high relative to revenue. Still, Grove was profitable. Considering this is a ratio if Grove Inc. kept its operating costs at consistent levels, and revenues increased, this is where higher and higher profits will be driven. Considering the potential for big revenue gains, I feel confident that operating efficiencies will improve. That has the potential to really drive GRVI stock higher.

Grove Inc EBITDA & Net Profits

Gross profits are positive but, if you break down the math, you can see that there is a lot more upside. EBITDA/Revenue is low yet, continuing costs are saving Grove Inc. They have little debt, a very low share count (And, recently bought shares back), and this adds up to profits.

But, if Grove Inc. actually does hit its revenue gain projections, there is a lot of upside profit potential that will drive GRVI stock.

Grove Inc Cash On Hand

From a cash:debt ratio standpoint, Grove Inc. has more cash than debt making it one of the few companies sitting in such a solid position. And, since Grove Inc. is net earnings positive, this is a stock that can focus on acquiring more products to expand its portfolio.

Grove Inc. management recently bought back stock. If you cannot invest in a venture that makes sense to bring in profits, then buying your own stock is a way to create investor value by retiring stock. That means the slice of the pie gets bigger for the remaining shareholders.

Grove Inc Total Equity

Not only does Grove Inc. have excellent cash:debt ratio with its low debt, assets:liabilities ratio is also in an excellent position. This is a company that has a sound financial standing. In fact, they may be one of the best-positioned companies when you look at this metric.

Grove Inc. GRVI Stock Forecast

Grove Inc. GRVI Stock Q4 Discounted Cash Flow Calculation

As you can see, there is plenty of upside potential with Grove when working on a discounted cash flow calculation. GRVI Stock forecast has significant upside potential and, this is consistent with a vast majority of stocks in the sector. Most cannabis stocks are approximately 95% undervalued and have a solid 5x – 10x upside potential. And, until cannabis federal legalization happens, this may be the case for some time.

Is Grove Inc. GRVI Stock A Good Investment?

The business plan is solid, to acquire existing companies and expand the market. They are white label producers and have the capability to build up large-scale operations. While I typically shy away from CBD product producers simply because of the low barriers to entry which would bring in significant competition, Grove is getting the job done. Should Grove continue to grow revenues and improve margins, GRVI stock will more than likely move upward to its intrinsic value.

While I think Grove Inc. can get the job done, I will not be adding them to my portfolio. However, this is a company that can participate in the cannabis boom and will potentially be profitable for an investor in the long run. Should an investor be holding this stock, they would do well to hold for the long term.

Grove Inc Financial Data

Grove Inc GRVI Stock Financial Data