SMG Should I Buy
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BUY now. SMG’s technical setup is bullish (bullish MA stack, positive/expanding MACD) and options positioning is clearly call-leaning (low put/call ratios), which fits an impatient buyer who doesn’t want to wait for a perfect dip. Near-term upside is supported by event catalysts (announced $500M buyback and potential Hawthorne sale) and generally constructive sell-side targets (most bullish PTs sit above current price). The main drawback is weak top-line in the latest quarter, but price action/positioning suggests the market is looking through it toward margin improvement, debt paydown, and capital return. Immediate path: a push toward ~65.6 then ~67.5; a clean break above those levels strengthens the case for a quick follow-through move toward the low-70s where several targets cluster.
Intellectia Proprietary Trading Signals
Trend/momentum is bullish-to-moderately bullish. The moving averages are in a bullish stack (SMA_5 > SMA_20 > SMA_200), indicating an established uptrend across short/medium/long horizons. MACD histogram is positive (0.0302) and expanding, supporting continued upside momentum. RSI(6) at ~64 is constructive (not overbought, but getting warm), implying room for continuation without being extended.
Key levels: Pivot 62.54 is the primary support reference; a hold above it keeps the uptrend intact. Resistance sits at R1 65.61 then R2 67.50. With price at 64.53, the stock is close enough to resistance that a breakout attempt is plausible; if it fails, a quick retest of ~62.5 is the likely pullback zone. Pattern-based projection provided: ~+1.98% next week and ~+2.28% next month (with a small -0.11% bias next day).
Capital return: company approved a $500M share repurchase program (near-term support for the stock and a valuation backstop).
Portfolio action: advanced discussions to sell Hawthorne subsidiary (potential simplification, improved focus, possible balance-sheet benefit depending on proceeds/structure).
Profitability trajectory: gross margin improved YoY (+5.97%), and non-GAAP EPS (-$0.
beat expectations, supporting the narrative of operational improvement despite revenue pressure.
Sell-side constructive elements: recent Buy ratings (Jefferies, Stifel) emphasize margin expansion, debt paydown, and potential return to buybacks (now explicitly underway).
Weak top-line: latest quarter revenue declined materially (financial snapshot shows -14.97% YoY; news mentions -3.3% YoY, but both indicate contraction), which can cap upside if demand doesn’t re-accelerate.
Earnings quality headline: Q1 2026 net loss was reported at $125M and described as significantly worse than the prior year, which can weigh on sentiment and keep some investors cautious.
Execution/event risk: the Hawthorne sale discussions are not finalized; deal terms or timing uncertainty could create headline-driven volatility.
Price is near resistance (65.6): a failure at/near R1 could trigger an impatient shakeout back toward ~62.5 support.
Latest quarter: 2026/Q1. Revenue fell to ~$354.4M (down ~14.97% YoY per snapshot), signaling continued demand/volume pressure. Net income was -$125M (a net loss; news summary frames it as worse than last year). Despite the loss, profitability indicators improved on a gross basis: gross margin rose to ~25.4% (+5.97% YoY), consistent with the margin-expansion narrative. EPS in the snapshot is -2.16 (YoY improvement per snapshot), and the company also reported non-GAAP EPS of -$0.77, which beat expectations. Overall: top-line is the weak point, but margin trend is improving, which is typically what supports multi-month recoveries in consumer/seasonal names.
Recent analyst trend is mixed but tilting constructive on upside potential: UBS remains Neutral with a modest PT lift to $67 (from $66) on 2026-01-29, indicating limited conviction but acknowledging incremental improvement. In contrast, Stifel upgraded to Buy (PT $70) and Jefferies reiterated Buy while raising PT to $74, highlighting expected gross margin expansion, debt paydown, and improved volume/pricing balance.
Wall Street pro view (pros/cons): Pros: margin expansion story, capital returns (buyback), balance-sheet improvement path, and potential Hawthorne monetization. Cons: ongoing revenue contraction and the optics of a larger net loss keep some firms cautious (hence UBS Neutral) and can limit multiple expansion until sales stabilize.
