Top undervalued cannabis stocks to watch in 2022
- Cannabis market stocks have struggled to post a positive bottom line in the last 12 months.
- As a result, it is difficult to find stocks with a positive P/E ratio.
- GrowGeneration and Hydrofarm Holdings are among the few that stand out.
Very few cannabis stocks managed a positive bottom line over the last 12 months. Here we discuss two of the most likely undervalued marijuana stocks to watch in 2022.
GrowGeneration Corp (NASDAQ:GRWG) posted earnings per share of $0.31 in the trailing 12-month period and expects to post a similar figure in 2022. Therefore, given the company’s exciting valuation of a 36.12 P/E ratio, GrowGeneration could be one of the top cannabis stocks to watch in 2022.
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Technically, GrowGeneration shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted closer to the oversold conditions of the 14-day RSI.
Therefore, investors could target potential rebounds at about $16.88, or higher at $22.46, while $4.35 is a crucial support zone.
Like its counterpart, Hydrofarm Holdings Group Inc. (NASDAQ:HYFM) is not a pure-play cannabis stock. However, some of its products cover the marijuana industry, which is why it is one of the few that have a positive bottom line.
The stock trades at a P/E ratio of about 92.54, based on its trailing 12-month EPS of $0.26. However, analysts expect HYFM’s bottom line to rocket to $1.02 this year making it a potentially undervalued stock.
Technically, Hydrofarm shares seem to have recently found support after pulling back towards oversold conditions.
Therefore, investors could target rebound profits at about $28.12 and $33.90, while $18.54 and $12.82 are support levels.
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