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SMG Stock: Trapped in the Garden Shed — Why It’s Down ~13% This Year and ~63% Since 2020
Scotts Miracle-Gro (SMG) is supposed to be the stock that makes lawns greener. Instead, investors have been staring at a patch of dirt. Over the past year, SMG has basically traded sideways—down about 13%. Since 2020, it’s wilted by roughly 63%. That’s not a garden party, that’s a weed invasion.
So what happened to this once-blooming stock? Let’s grab the gardening gloves and dig in.
The Pandemic Party Is Over
In 2020, stuck-at-home families turned into amateur botanists. Backyard tomatoes, DIY lawns, hydroponic experiments—you name it, people were growing it. Scotts Miracle-Gro became the ultimate “stay-at-home stock,” soaring as demand exploded.
Fast forward to 2025, and the frenzy has cooled. People went back to restaurants and offices, and many realized that keeping plants alive is harder than keeping sourdough starter alive. SMG’s sales comps got tougher, and growth started looking less like Miracle-Gro and more like Miracle-No.
The Cannabis Hangover
SMG didn’t just bet on lawns and mulch—it bet big on cannabis. Through its Hawthorne division, Scotts poured money into hydroponics, lighting, and grow equipment, assuming federal legalization would open the floodgates. Instead, legalization stalled, cannabis oversupply crushed margins, and Hawthorne became a financial dandelion: hard to kill and always spreading losses.
Management has been pruning that business ever since, but the $2+ billion in write-downs left a long scar on the balance sheet. Investors haven’t forgotten.
Supply Chain Weeds
Like many companies, Scotts got whacked by supply chain chaos—freight costs, raw material inflation, and inconsistent logistics. It has since started cutting costs aggressively, targeting over $150 million in savings by 2027. The problem? Investors don’t fertilize stocks based on promises—they want results today.
Earnings That Went Limp
Here’s the brutal math: over the last five years, Scotts’ earnings have fallen by more than 40% per year on average. Yes, they’ve clawed their way back into profitability recently, but the memory of collapsing profits makes Wall Street skittish.
Valuation Vertigo
Despite weak fundamentals, SMG still trades at a P/E ratio north of 70. That’s nosebleed territory for a company selling potting soil. Investors look at that number and wonder: “Am I buying a growth company or a lawn mower?” Until earnings catch up, valuation is another thorn in the side.
Dividend Drama and Short Seller Snacks
Scotts used to attract investors with a healthy dividend. Then came cuts, balance sheet worries, and rising short interest. When short sellers smell blood (or fresh mulch), they pile in—and that keeps the stock under pressure even when fundamentals show small improvements.
Why the Garden Isn’t Dead Yet
It’s not all doom and gloom. Consumer demand is showing signs of life again: lawn care, mulch, and gardening categories have recently posted double-digit growth. The company’s cost-cutting is real, with savings already flowing through. And a more focused strategy—shrinking cannabis exposure and doubling down on core lawn and garden brands—could slowly re-win investor trust.
Analysts peg fair value closer to $70 per share, suggesting some upside if execution improves. The long-term bet is simple: people may cut back on tech gadgets, but they’ll never stop mowing lawns or buying fertilizer.
The Bottom Line
SMG stock is like that one plant you forgot to water—it looks rough, but it’s not dead. Down 13% in the past year and 63% since 2020, Scotts Miracle-Gro is paying the price for a pandemic boom-and-bust cycle, an overgrown cannabis bet, and persistent supply chain headaches.
For now, investors are stuck watching grass grow—literally. But if management can deliver on cost savings, refocus on its core products, and let the cannabis misadventure fade into the compost pile, SMG might just sprout again.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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