After trading sideways for the better part of the first quarter, Growlife Inc (OTCMKTS:PHOT) is showing signs of ticking higher in line with our previous update. Price action suggests the stock could trade higher as investors take note of recent developments that have shown the company’s core business is experiencing robust growth.
Revenue growing by more than 100% in the fourth quarter is the latest catalyst that appears to be pushing the stock up the charts. In addition, the company has strengthened its product line with the unveiling of a new eco-friendly product line that further affirms its long-term growth prospects.
A recent surge in trading volume of GrowLife further arouses suggestions that investors are slowly tickling back to the stock, pointing to a potential spike in the share price. While the stock is currently trading at, the $0.0195 handle, it needs to rise and stabilize above the $0.025 handle to affirm confidence that the sell-off rout is over.
On the downside, the stock faces immediate support at the $0.01 handle below which it could edge lower and record a new 52-week low.
Given that upside, momentum is showing signs of picking up, Growlife could break out of the tight trading range it has been stuck in, for months.
GrowLife Business Description
GrowLife is a provider of farming soil, hydroponics equipment, as well as organic nutrients and other products for specialty, grow operations in the U.S. The company strives to become the largest cultivation service provider for cultivating organics, herbs as well as plant-based medicines.
GrowLife has also embarked on an expansion drive as it looks to strengthen its operations and distribution network, in a bid to provide customers with cutting-edge cultivation products. The launch of a state-of-the-art manufacturing facility in Dallas marks the first step in the company’s push to meet growing demand for its products and services.
Why is GrowLife Spiking High?
The stock has been climbing high in response to 131% increase in revenue in the fourth quarter ended December 31, 2017. The company registered continued growth the better part of last year, a trend expected to continue in 2018.
Net revenue for the full year nearly doubled to $2.45 million, compared to revenues of $1.23 million reported in 2016. Operating loss for the year dropped to (-$2 million) from (-$2.8) million as of the end of 2016. GrowLife exited the year with assets worth $861,866 compared to $534,576 as of 2016, an increase of 61%.
“From strategic asset acquisitions and positive structuring to further financing and international expansion, the Company experienced tremendous growth and captured new markets last year. We were able to bring in top-tier talent and business partners as well as attract new customers in both our commercial and consumer businesses,” said GrowLife, Inc. CEO Marco Hegyi.
The upgrade of GrowLife from OTC Pink Market to OTCQB Market is another development that seems to have shone the light on the stock triggering the recent bounce back. Listing in the advanced market is a significant step forward that allows the company to gain exposure from institutional investors.
The upgrade also paves the way for the company to gain access to capital markets, where it will be able to pursue new financing to advance development projects. According to the Chief Executive Officer, Listing on the OTCQB underscores the company’s commitment to accountability and transparency.
Eco-Friendly Product Launch
The indoor cultivation and service provider has unveiled a new line of sustainable, eco-friendly products as it continues to explore ways of strengthening its revenues streams while meeting customer needs. The new product line is curated to ensure the production of products of high quality and affordable products that are also environmentally friendly compared to traditional products
The product line features items such as lighting nutrients & growing mediums, climate control devices as well as plant care products.
“The launch of this product line assists in that commitment by offering a sustainable solution with all of the efficient production benefits our customers expect. These green products will enable our customers to make the important shift to more sustainable indoor growing practices that will garner more trust from their customers while preparing them for any further regulatory and social obligation placed on this industry with respect to sustainability,” said Mr. Hegyi.
In addition, Growlife has filed a provisional patent that details a novel process for repurposing waste materials into building materials and other products that can be used in indoor cultivation centers. The patent focuses on waste materials from plants of the cannabis family, following the extraction oils
According to the Chief Executive Officer, the novel process will provide an innovative solution for addressing a problem that can only get worse as demand for plant-based products increases.
What Next For GrowLife
GrowLife has served up, the right catalysts sure to strengthen investor confidence in its growth prospects. Stellar financial results for 2017 that show the company is growing at an impressive rate is another plus that should enhance the stock’s sentiments on Wall Street.
There is no doubt Growlife is headed in the right direction given that the management team has shown it is capable of executing on the growth strategy. That said, the stock looks set to bottom out from the current lows.
Disclosure: We have no position in PHOT and have not been compensated for this article.