Adecoagro SA (AGRO) AI Stock Analysis

• Market Cap: $937.94M
• Dividend Yield: 3.69%
• Average Volume (3M): 422.57K
• Price to Earnings (P/E): 15.0
• Beta (1Y): -0.08
• 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: 438,321
• 30 Day Avg. Volume: 422,573
• PEG Ratio: -2.48
• Price to Book (P/B): 3.32
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 46.21
• Enterprise Value/Market Cap: 6.17
• Enterprise Value/Revenue: 1.04
• Enterprise Value/Gross Profit: 18.40
• Enterprise Value/Ebitda: 2.96
• 1Y Price Target: $9.63
• Price Target Upside: 1.80% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: $10.00 ▲(5.71%Upside)

Adecoagro SA's overall stock score is driven by its stable financial performance and strategic developments, such as Tether's 70% stake acquisition. Despite these positives, the company faces significant challenges, including a substantial decline in EBITDA and production issues in the sugar, ethanol, and energy segments. Technical indicators suggest cautious short-term momentum, and valuation metrics are reasonable but not compelling. The stock is positioned for potential improvement, contingent on resolving current operational challenges and leveraging new investments.

Positive Factors

Financial performance

Sugar prices are anticipated to recover from current depressed levels, which could benefit the company's financial performance if the outcome of the frosts is favorable.

Operational stability

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

Negative Factors

Financial outlook

The company's EBITDA and free cash flow estimates have been significantly reduced due to unfavorable weather conditions and declining sugar prices.

Shareholder uncertainty

The uncertainty regarding the long-term strategy of Tether Investments as the controlling shareholder brings risk to the thesis.

Weather impact

Adverse weather events, including frosts and heavy rainfall, are expected to negatively impact Adecoagro's sugarcane crop outlook.

Adecoagro SA Business Overview & Revenue Model

Company Description

Adecoagro SA (AGRO) is a leading agricultural company operating primarily in South America, with a focus on Argentina, Brazil, and Uruguay. The company engages in the production of a diverse range of agricultural products, including crops, dairy products, sugar, ethanol, and energy. Adecoagro is involved in the entire value chain, from planting and harvesting to processing and marketing, leveraging its vast land holdings and integrated operations to maximize efficiency and productivity.

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 displays stable financial performance with strong cash flow generation and operational efficiency. The EBIT and EBITDA margins are solid, reflecting competent management. However, challenges in enhancing net profitability and shareholder returns remain, with a moderate income statement and balance sheet performance.

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

Adecoagro SA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 9.46
• 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 Neutral. The current price of 9.46 is above the 20-day moving average (MA) of 9.35, above the 50-day MA of 9.31, and below the 200-day MA of 10.19, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 51.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	$1.69B	11.52	7.51%	3.09%	-0.64%	―
LND	71 Outperform	$361.77M	6.45	15.25%	1.56%	1.09%	21.46%
DOLE	70 Outperform	$1.36B	14.52	8.87%	2.26%	0.91%	-49.71%
AGRO	68 Neutral	$937.94M	14.98	4.51%	3.69%	17.05%	-73.53%
Sector *	65 Neutral	$27.19B	15.58	-4.44%	2.56%	1.05%	4.97%
VFF	63 Neutral	$158.40M	―	-14.58%	―	12.09%	-40.10%
LMNR	61 Neutral	$275.73M	36.96	-0.97%	1.97%	-0.94%	0.47%