Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

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Equity Bottom-Up

Hydrofarm Holdings Group Inc / Equity Bottom-Up

<div><ul><li>Hydrofarm is a non-plant touching, NASDAQ-listed, leading manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture (CEA). </li><li>The company’s products consist primarily of consumable products, such as nutrients and grow media, and durable products, such as grow lights, climate control solutions, rolling racks/benches, and various other equipment and supplies.</li><li>Cannabis-related downturn could be ending. HYFM has seen a precipitous decline in revenue and profitability from 2021 peak revenue of nearly $480MM to $190MM in 2024 and could decline further to ~$150MM in 2025. </li></ul></div>

Hydrofarm is a non-plant touching, NASDAQ-listed, leading manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture (CEA). The company’s products consist primarily of consumable products, such as nutrients and grow media, and durable products, such as grow lights, climate control solutions, rolling racks/benches, and various other equipment and supplies.Cannabis-related downturn could be ending. HYFM has seen a precipitous decline in revenue and profitability from 2021 peak revenue of nearly $480MM to $190MM in 2024 and could decline further to ~$150MM in 2025. 

HYFM: As Cannabis Market's Headwinds Subside, 2026 Could See a Return to Growth