Adecoagro SA (AGRO) AI Stock Analysis

• Market Cap: $919.94M
• Dividend Yield: 3.8%
• Average Volume (3M): 452.27K
• Price to Earnings (P/E): 14.7
• Beta (1Y): -0.09
• Revenue Growth: 17.05%
• EPS Growth: -73.53%
• Country: US
• Employees: 8,896
• Sector: Consumer Defensive
• Sector Strength: 55
• Industry: Agricultural Farm Products
• EPS (TTM): -0.09
• Shares Outstanding: 99,993,160
• 10 Day Avg. Volume: 318,902
• 30 Day Avg. Volume: 452,267
• PEG Ratio: -2.43
• Price to Book (P/B): 3.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 45.25
• Enterprise Value/Market Cap: 6.22
• Enterprise Value/Revenue: 1.03
• Enterprise Value/Gross Profit: 18.18
• Enterprise Value/Ebitda: 2.92
• 1Y Price Target: $9.80
• Price Target Upside: 4.59% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 65 Neutral
• Price Target: $9.50 ▲(1.39%Upside)

Adecoagro SA's overall stock score is driven primarily by stable financial performance and reasonable valuation. The technical analysis indicates potential concerns with weak momentum. The earnings call presents a mixed outlook, with significant challenges balanced by strategic investments and growth opportunities.

Positive Factors

Company Stability

Tether Investments plans to maintain Adecoagro's main executives and business structure, reducing the risk of disruptive changes in the company.

Corporate Governance

Adecoagro's new Board of Directors must include at least three independent members, ensuring checks on third-party transactions.

Negative Factors

Financial Performance

Very weak results in recent quarters due to lower prices, weather challenges, and biological asset losses.

Share Liquidity

The risk of lower liquidity of Adecoagro shares and uncertainty regarding Tether Investments' long-term strategy have contributed to the downgrade.

Adecoagro SA Business Overview & Revenue Model

Company Description

Adecoagro S.A. operates as an agro-industrial company in South America. It engages in farming crops and other agricultural products, dairy operations, and land transformation activities, as well as sugar, ethanol, and energy production activities. The company is involved in the planting, harvesting, and sale of grains and oilseeds, as well as wheat, corn, soybeans, peanuts, cotton, sunflowers, and others; provision of grain warehousing/conditioning, handling, and drying services to third parties; and purchase and sale of crops produced by third parties. It also plants, harvests, processes, and markets rice; and produces and sells raw milk, UHT, cheese, powder milk, and others. In addition, the company engages in the cultivating, processing, and transforming of sugarcane into ethanol and sugar; and the sale of electricity cogenerated at its sugar and ethanol mills to the grid. Further, it is involved in the identification and acquisition of underdeveloped and undermanaged farmland, and the realization of value through the strategic disposition of assets. As of December 31, 2021, the company owned a total of 219,850 hectares of land, including 18 farms in Argentina, 8 farms in Brazil, and 1 farm in Uruguay, as well as a total of 241 megawatts of installed cogeneration capacity. Adecoagro S.A. was founded in 2002 and is based in Luxembourg, Luxembourg.

How the Company Makes Money

Adecoagro makes money through its diversified portfolio of agricultural activities. The company's key revenue streams include the sale of crops such as soybeans, corn, and wheat, which are major contributors to its earnings. Additionally, Adecoagro generates revenue from its dairy operations by producing and selling milk and other dairy products. The sugar, ethanol, and energy business segments also play a significant role in the company's revenue model. Sugar is sold in domestic and international markets, while ethanol is produced for fuel and industrial uses. The company further capitalizes on its expertise in energy generation by producing electricity from renewable sources, such as biomass. Partnerships with local and international distributors, along with operational efficiencies, contribute to Adecoagro's profitability.

Adecoagro SA Financial Statement Overview

Summary

Adecoagro SA demonstrates stable financial performance with robust cash flow generation and decent operational efficiency. The company has solid EBIT and EBITDA margins and a prudent balance sheet with moderate leverage. However, challenges remain in enhancing net profitability and shareholder returns.

Income Statement

Adecoagro SA shows a moderate financial performance with a solid Gross Profit Margin of 20.1% for TTM, reflecting stable profitability given its industry. The Net Profit Margin is at 4.0% for TTM, which is relatively low but consistent with agricultural sector norms. Revenue growth has been slow, with a modest increase of 3.2% from the previous year. However, the EBIT and EBITDA margins for TTM are 7.8% and 27.2%, respectively, indicating decent operational efficiency. The company faces challenges in improving net profitability despite steady revenues.

Balance Sheet

The balance sheet of Adecoagro SA reflects a stable financial position with a Debt-to-Equity Ratio of 0.90, suggesting manageable leverage levels. The Equity Ratio stands at 42.4% for TTM, which indicates a healthy proportion of equity financing, providing some cushion against liabilities. Return on Equity (ROE) is relatively low at 4.4% for TTM, highlighting the need for improved profitability. The company maintains a strong asset base, but its ability to generate returns is an area for improvement.

Cash Flow

Adecoagro SA's cash flow statements indicate robust cash generation with an Operating Cash Flow to Net Income Ratio of 5.6 for TTM, reflecting strong cash earnings relative to net income. The Free Cash Flow to Net Income Ratio is 1.63, demonstrating effective cash flow management. Free Cash Flow has shown impressive growth, increasing by 54.4% from the previous year, supporting the company's capacity to invest in growth and service debt. Overall, the cash flow position is solid, enhancing financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.57B	1.52B	1.30B	1.35B	1.12B	817.76M
Gross Profit	314.69M	361.51M	415.39M	465.63M	484.25M	335.55M
EBITDA	425.61M	426.38M	561.06M	397.65M	453.24M	245.45M
Net Income	62.68M	92.34M	226.29M	108.14M	130.67M	1.07M
Balance Sheet
Total Assets	3.35B	3.11B	3.16B	3.11B	2.58B	2.48B
Cash, Cash Equivalents and Short-Term Investments	238.97M	211.24M	339.78M	230.65M	199.77M	336.28M
Total Debt	1.28B	1.12B	1.28B	1.35B	1.06B	1.17B
Total Liabilities	1.89B	1.71B	1.90B	1.95B	1.53B	1.52B
Stockholders Equity	1.42B	1.37B	1.23B	1.13B	1.01B	925.04M
Cash Flow
Free Cash Flow	102.19M	66.19M	191.48M	139.80M	135.66M	80.14M
Operating Cash Flow	350.93M	328.33M	434.91M	370.03M	348.66M	257.13M
Investing Cash Flow	-243.02M	-231.56M	-173.67M	-299.26M	-175.22M	-121.92M
Financing Cash Flow	-86.18M	-274.00M	-208.74M	-23.57M	-303.13M	-53.92M

Adecoagro SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.37
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGRO, the sentiment is Positive. The current price of 9.37 is above the 20-day moving average (MA) of 9.26, above the 50-day MA of 9.29, and below the 200-day MA of 10.32, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 52.55 is Neutral, neither overbought nor oversold. The STOCH value of 50.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGRO.

Adecoagro SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDP	72 Outperform	$1.59B	10.82	7.51%	3.61%	-0.64%	―
LND	72 Outperform	$373.14M	6.59	15.25%	6.44%	1.09%	21.46%
DOLE	71 Outperform	$1.34B	14.30	8.87%	2.41%	0.91%	-49.71%
Sector *	65 Neutral	$27.33B	15.36	-4.01%	3.14%	1.00%	1.98%
AGRO	65 Neutral	$919.94M	14.69	4.51%	3.80%	17.05%	-73.53%
LMNR	60 Neutral	$295.43M	36.96	-0.97%	1.82%	-0.94%	0.47%
VFF	59 Neutral	$139.30M	―	-14.58%	―	12.09%	-40.10%