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MIAMI - HumanCo Investments, which holds more than 5% stake in Grove Collaborative Holdings, Inc. (NYSE:GROV), has publicly called for the eco-friendly products retailer to explore strategic alternatives, including a potential sale of the business. According to InvestingPro data, Grove currently maintains a market capitalization of $47.5 million, with its shares trading near $1.17.
In a letter sent Tuesday to Grove’s board of directors, HumanCo urged the company to conduct a comprehensive review of options that could include selling to a larger strategic company, pursuing a take-private transaction with a financial sponsor, or merging with a profitable company. InvestingPro analysis suggests the company operates with moderate debt levels and maintains healthy liquidity, with a current ratio of 1.48.
HumanCo believes Grove could be valued at approximately 0.70x to 0.90x of its estimated 2025 revenue in such a transaction, potentially representing a 90% to 140% premium over the current share price of $1.19, or about $2.25 to $2.90 per share on a fully diluted basis.
The investment firm argued that despite Grove’s strong competitive position in the non-toxic products marketplace, with 700,000 active customers and actual trailing twelve-month revenue of $193.43 million and an impressive gross margin of 53.08%, the company remains "deeply undervalued" in the public market due to its small market capitalization and limited float. This assessment aligns with InvestingPro’s Fair Value analysis, which indicates the stock may be undervalued at current levels. Discover comprehensive valuation metrics and 10 additional key ProTips with an InvestingPro subscription.
HumanCo noted that Grove has achieved profitability and generated positive operating cash flow over the past year, with minimal debt and over $500 million in net operating losses that could be utilized in a strategic transaction. Recent InvestingPro data shows the company’s next earnings report is expected on August 8, 2025, which could provide further insights into its financial trajectory.
"Grove stands at a crossroads," wrote HumanCo in its letter, suggesting the company needs a partner with the necessary capital and operational infrastructure to invest in a long-term, growth-oriented strategy.
The investment firm requested that Grove’s board form a strategic review committee, engage an investment bank to assess acquirer interest, and commit to a transparent process with regular shareholder updates.
According to the press release statement, Grove Collaborative specializes in sustainable household, personal care, and wellness products.
In other recent news, Grove Collaborative Holdings Inc. reported a significant decline in its first-quarter 2025 revenue, which fell 18.7% year-over-year to $43.5 million. The company’s active customer count also decreased by 16% to 678,000, reflecting challenges in maintaining its customer base. Despite these setbacks, Grove Collaborative is focusing on strategic acquisitions and platform improvements to drive future growth. The company has completed the acquisitions of third-party brands Grab Green and Eat Greens, aiming to integrate these into its operations. Grove Collaborative has also expanded its third-party assortment, increasing the number of brands offered by 41% year-over-year. Additionally, the firm has revised its full-year 2025 revenue guidance, projecting a mid-single to low double-digit percentage decline. Analyst firms have not reported any recent upgrades or downgrades of the stock. The company remains optimistic about future quarters, with expectations for revenue improvements and strategic growth initiatives.
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