Adecoagro SA (AGRO) AI Stock Analysis

• Market Cap: $827.94M
• Dividend Yield: 4.21%
• Average Volume (3M): 510.97K
• Price to Earnings (P/E): 23.2
• Beta (1Y): -0.03
• Revenue Growth: 19.45%
• EPS Growth: -82.38%
• Country: US
• Employees: 8,896
• Sector: Consumer Defensive
• Sector Strength: 45
• Industry: Agricultural Farm Products
• EPS (TTM): -0.17
• Shares Outstanding: 99,993,160
• 10 Day Avg. Volume: 581,653
• 30 Day Avg. Volume: 510,971
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.43
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 7.46
• Enterprise Value/Ebitda: 5.41
• 1Y Price Target: $9.08
• Price Target Upside: 9.66% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 4

• Rating: 59 Neutral
• Price Target: $9.00 ▲(8.70% Upside)

Adecoagro SA's overall stock score reflects a stable but challenged financial performance, with significant concerns about revenue growth and cash flow generation. Technical indicators suggest a lack of upward momentum, and the valuation appears high relative to peers. The earnings call highlighted both innovative initiatives and significant operational challenges, particularly in the Sugar, Ethanol, and Energy segment.

Positive Factors

Agricultural Yields

Crop yields are expected to align with historical levels, with rice yields recovering and the planted area increasing due to favorable weather conditions.

Financial Performance

Adecoagro was able to sell carry-over inventories of hydrous ethanol at strong prices, leading to a 6.4% YoY top line growth in the sugar and ethanol division.

Operational Management

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

Negative Factors

Commodity Prices

Farming operations in Argentina are under pressure due to low commodity prices, leading to continued downward trends.

Market 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 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 generates revenue through multiple streams, primarily from the sale of agricultural commodities such as soybeans, corn, and wheat, as well as from dairy products and sugar. The company capitalizes on its extensive land holdings and advanced agricultural practices to maximize crop yields and ensure high-quality production. Additionally, Adecoagro profits from its renewable energy segment by producing and selling electricity generated from biomass and sugarcane. Key partnerships with distributors and retailers enhance its market reach, while investments in technology and sustainable farming practices contribute to operational efficiency and cost savings, further boosting its earnings.

Adecoagro SA Financial Statement Overview

Summary

Adecoagro SA's financial performance is mixed. The income statement shows profitability despite a significant drop in revenue growth. The balance sheet is stable with manageable leverage, but the cash flow statement highlights concerns with declining free cash flow growth. The company needs to address revenue growth and cash flow generation to strengthen its financial position further.

Income Statement

Adecoagro SA's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 90.2%, which is concerning. However, the company maintains a positive net profit margin of 2.29% and a gross profit margin of 17.39%. The EBIT and EBITDA margins are also positive at 7.40% and 23.99%, respectively, indicating operational efficiency. Despite the recent revenue decline, the company has shown resilience in maintaining profitability.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.92 in the TTM period, showing a decrease from previous years, which indicates improved leverage management. The return on equity (ROE) is modest at 2.56%, suggesting room for improvement in generating returns for shareholders. The equity ratio stands at 41.85%, indicating a solid equity base relative to total assets. Overall, the balance sheet suggests a stable but not overly aggressive financial strategy.

Cash Flow

The cash flow statement reveals challenges in cash generation. The free cash flow growth rate has declined by 20.64% in the TTM period, which is a concern. The operating cash flow to net income ratio is 0.61, indicating adequate cash generation relative to net income. The free cash flow to net income ratio is 0.23, suggesting limited free cash flow relative to net earnings. While the company generates positive cash flow, the declining growth rate poses a risk to future liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.55B	1.52B	1.30B	1.35B	1.12B	817.76M
Gross Profit	270.07M	361.51M	415.39M	465.63M	484.25M	335.55M
EBITDA	372.75M	426.38M	561.06M	397.65M	453.24M	245.45M
Net Income	35.60M	92.34M	226.29M	108.14M	130.67M	1.07M
Balance Sheet
Total Assets	3.28B	3.11B	3.16B	3.11B	2.58B	2.48B
Cash, Cash Equivalents and Short-Term Investments	205.67M	211.24M	339.78M	230.65M	199.77M	336.28M
Total Debt	1.27B	1.12B	1.28B	1.35B	1.06B	1.17B
Total Liabilities	1.87B	1.71B	1.90B	1.95B	1.53B	1.52B
Stockholders Equity	1.37B	1.37B	1.23B	1.13B	1.01B	925.04M
Cash Flow
Free Cash Flow	75.03M	65.00M	191.48M	139.80M	135.66M	80.14M
Operating Cash Flow	323.57M	328.33M	434.91M	370.03M	348.66M	257.13M
Investing Cash Flow	-211.19M	-231.56M	-111.55M	-299.26M	-175.22M	-121.92M
Financing Cash Flow	-119.46M	-274.00M	-208.74M	-23.57M	-303.13M	-53.92M

Adecoagro SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGRO, the sentiment is Negative. The current price of 8.28 is below the 20-day moving average (MA) of 8.69, below the 50-day MA of 9.04, and below the 200-day MA of 9.84, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 34.84 is Neutral, neither overbought nor oversold. The STOCH value of 16.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGRO.

Adecoagro SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDP	76 Outperform	$1.71B	11.57	7.49%	3.20%	1.41%	―
LND	71 Outperform	$385.93M	6.66	6.28%	6.27%	0.32%	-42.97%
VFF	66 Neutral	$299.63M	39.26	-1.99%	―	-6.23%	―
Sector *	63 Neutral	$20.50B	14.76	-2.72%	3.09%	1.90%	-4.74%
DOLE	62 Neutral	$1.27B	59.09	8.29%	2.40%	4.75%	-88.74%
AGRO	59 Neutral	$827.94M	23.20	2.63%	4.21%	19.45%	-82.38%
LMNR	57 Neutral	$288.38M	36.96	-0.97%	1.90%	-0.94%	0.47%