GrowGeneration (NASDAQ:GRWG) and ZKH Group (NYSE:ZKH) Critical Analysis

GrowGeneration (NASDAQ:GRWG) and ZKH Group (NYSE:ZKH) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Earnings & Valuation

This table compares GrowGeneration and ZKH Group’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrowGeneration	$225.88 million	0.81	-$46.50 million	($0.75)	-3.99
ZKH Group	$1.23 billion	1.20	-$43.00 million	N/A	N/A

ZKH Group has higher revenue and earnings than GrowGeneration.

Institutional and Insider Ownership

36.0% of GrowGeneration shares are owned by institutional investors. Comparatively, 9.5% of ZKH Group shares are owned by institutional investors. 4.6% of GrowGeneration shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GrowGeneration	-20.58%	-15.60%	-11.43%
ZKH Group	N/A	N/A	N/A

Analyst Ratings

This is a summary of current ratings and price targets for GrowGeneration and ZKH Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrowGeneration	0	1	2	0	2.67
ZKH Group	0	0	1	0	3.00

GrowGeneration presently has a consensus target price of $4.88, indicating a potential upside of 63.04%. ZKH Group has a consensus target price of $21.30, indicating a potential upside of 85.22%. Given ZKH Group’s stronger consensus rating and higher possible upside, analysts plainly believe ZKH Group is more favorable than GrowGeneration.

Summary

ZKH Group beats GrowGeneration on 8 of the 11 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 ZKH Group

ZKH Group Limited develops and operates a maintenance, repair, and operating (MRO) products trading and service platform that offers spare parts, chemicals, manufacturing parts, general consumables, and office supplies in the People's Republic of China. The company provides MRO procurement and management services; digitalized MRO procurement solutions; and logistics and warehousing services. It also engages in the production and sale of intelligent warehousing equipment. ZKH Group Limited was founded in 1998 and is based in Shanghai, the People's Republic of China.