Critical Analysis: GrowGeneration (NASDAQ:GRWG) versus BARK (NYSE:BARK)

GrowGeneration (NASDAQ:GRWG) and BARK (NYSE:BARK) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Insider & Institutional Ownership

36.0% of GrowGeneration shares are owned by institutional investors. Comparatively, 28.8% of BARK shares are owned by institutional investors. 8.1% of GrowGeneration shares are owned by company insiders. Comparatively, 14.8% of BARK shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

GrowGeneration has a beta of 2.51, suggesting that its share price is 151% more volatile than the S&P 500. Comparatively, BARK has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500.

Profitability

This table compares GrowGeneration and BARK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GrowGeneration	-10.07%	-17.44%	-11.52%
BARK	-8.42%	-35.66%	-14.54%

Valuation and Earnings

This table compares GrowGeneration and BARK”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrowGeneration	$166.68 million	0.57	-$24.05 million	($0.27)	-5.96
BARK	$394.84 million	0.24	-$39.01 million	($3.58)	-2.99

GrowGeneration has higher earnings, but lower revenue than BARK. GrowGeneration is trading at a lower price-to-earnings ratio than BARK, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for GrowGeneration and BARK, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrowGeneration	1	1	1	0	2.00
BARK	1	2	2	0	2.20

GrowGeneration currently has a consensus price target of $2.50, indicating a potential upside of 55.28%. BARK has a consensus price target of $15.33, indicating a potential upside of 43.17%. Given GrowGeneration’s higher possible upside, analysts plainly believe GrowGeneration is more favorable than BARK.

Summary

GrowGeneration beats BARK on 8 of the 14 factors compared between the two stocks.

About GrowGeneration

GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.

About BARK

BARK Inc., a dog-centric company, provides products, services, and content for dogs. It operates in two segments, Direct to Consumer and Commerce. The company serves dogs through monthly subscription services. It is also involved in the design of playstyle-specific toys, satisfying treats, personal meal plans with supplements, and dog-first experiences designed to foster health and happiness of dogs everywhere. In addition, the company offers monthly themed box of toys and treats under the BarkBox and Super Chewer names; personalized meal plans under the BARK Food name; health and wellness products under the BARK Bright name; and dog beds, bowls, collars, harnesses, and leashes under the BARK Home brand. Further, the company sells BARK Home products through BarkShop.com. Additionally, it offers custom collections through online marketplaces, and brick and mortar retailers. The company was formerly known as The Original BARK Company and changed its name to BARK, Inc. in November 2021. BARK Inc. was incorporated in 2011 and is headquartered in New York, New York.