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The Andersons (ANDE)
NASDAQ:ANDE
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The Andersons
(NASDAQ:ANDE)71Outperform
Positive Factors
Earnings Diversification
Efforts to diversify earnings sources to make the bottom line more resilient throughout the ag cycle delivered.
Trade Segment Performance
Trade segment delivered a surprising 21% YoY EBITDA growth, versus estimates of a similar magnitude YoY decline.
Negative Factors
Market Reaction
The market's negative reaction to the quarter reflects some combination of YoY revenue declines and the delta between Adjusted and GAAP FCF.
The Andersons (ANDE) vs. S&P 500 (SPY)
Market Cap
$1.42B
Dividend Yield1.83%
Average Volume (3M)283.84K
Price to Earnings (P/E)12.6
Beta (1Y)0.67
Revenue Growth-23.68%
EPS Growth11.84%
CountryUS
Employees2,299
SectorIndustrials
Sector Strength66
IndustryRetailers - Staples
Share Statistics
EPS (TTM)3.33
Shares Outstanding34,028,010
10 Day Avg. Volume334,988
30 Day Avg. Volume283,836
Financial Highlights & Ratios
PEG Ratio1.06
Price to Book (P/B)N/A
Price to Sales (P/S)0.13
Price to Cash Flow (P/CF)1.30
P/FCF Ratio1.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$70.00Price Target Upside69.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
The Andersons Business Overview & Revenue Model
Company DescriptionThe Andersons, Inc. is a diversified agribusiness and retail company based in the United States. It operates through several segments, including Trade, Ethanol, Plant Nutrient, and Rail. The company is involved in grain merchandising and handling, ethanol production, plant nutrient formulation and distribution, and leasing, marketing, and management of railcar fleets. The Andersons is known for its strong agricultural presence, catering to a wide array of customers in the agricultural supply chain.
How the Company Makes MoneyThe Andersons, Inc. generates revenue through various streams, primarily anchored in its four main business segments. The Trade segment involves the merchandising and handling of grains, where the company earns from buying, storing, and selling grains in domestic and international markets. The Ethanol segment generates revenue from the production and sale of ethanol and related co-products, such as distillers' grains. In the Plant Nutrient segment, the company makes money by formulating, distributing, and retailing fertilizers and other crop inputs to agricultural producers. The Rail segment contributes to revenue through the leasing, marketing, and management of railcars, as well as the sale of rail components. The company's diverse operations, along with strategic partnerships and an extensive supply chain network, enable it to efficiently serve the agricultural sector and capitalize on market opportunities.
The Andersons Financial Statement Overview
Summary
The Andersons presents a mixed financial picture. The income statement indicates challenges in revenue growth and modest profit margins. However, the balance sheet highlights a solid reduction in debt and a strong equity position. Cash flow from operations is robust, but the decline in free cash flow warrants caution. Overall, the company is financially stable but faces potential growth challenges.Income Statement
The Andersons shows a mixed performance in its income statement. The TTM period sees a gross profit margin of 6.22% and a net profit margin of 1.01%, both of which are relatively low. Revenue has declined over recent years, indicating potential challenges in maintaining top-line growth. However, the company has managed to maintain positive net income, showcasing some stability in profitability.72
Positive
Balance Sheet
The balance sheet reflects a solid financial position with a significant reduction in total debt in the TTM period, leading to a lower debt-to-equity ratio. The equity ratio stands at a healthy 38.8%, indicative of a strong equity base. Return on equity is modest at 7.13%, suggesting room for improvement in generating returns on shareholder equity.79
Positive
Cash Flow
Cash flow analysis reveals a decrease in free cash flow growth, with TTM free cash flow lower compared to the previous year. The operating cash flow to net income ratio is strong at 2.91, indicating efficient cash generation from operations relative to net income. However, financing activities have consistently consumed cash, which could be a concern if operating cash flow weakens.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.26B | 14.75B | 17.33B | 12.61B | 8.21B | Gross Profit |
| 693.93M | 745.36M | 684.16M | 592.70M | 404.92M | EBIT |
| 190.31M | 253.10M | 251.43M | 206.38M | 26.80M | EBITDA |
| 360.32M | 341.54M | 361.35M | 378.27M | 195.42M | Net Income Common Stockholders |
| 114.01M | 101.19M | 131.08M | 103.99M | -14.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 561.77M | 643.85M | 115.27M | 216.44M | 29.12M | Total Assets |
| 4.12B | 3.86B | 4.61B | 4.57B | 4.27B | Total Debt |
| 231.93M | 665.29M | 912.39M | 1.17B | 1.43B | Net Debt |
| -329.85M | 21.43M | 797.13M | 949.41M | 1.40B | Total Liabilities |
| 2.52B | 2.34B | 3.18B | 3.26B | 3.11B | Stockholders Equity |
| 1.37B | 1.28B | 1.43B | 1.07B | 1.16B |
| Cash Flow | Free Cash Flow | |||
| 182.32M | 796.31M | 147.38M | -132.85M | -179.32M | Operating Cash Flow |
| 331.51M | 946.75M | 287.12M | -51.05M | -74.43M | Investing Cash Flow |
| -163.07M | -153.88M | -52.90M | 487.25M | -86.76M | Financing Cash Flow |
| -250.36M | -263.99M | -334.73M | -248.77M | 136.30M |
The Andersons Technical Analysis
Negative
41.40
Price Trends
41.95
Negative
44.37
Negative
46.85
Negative
Market Momentum
0.02
Positive
44.82
Neutral
8.77
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ANDE, the sentiment is Negative. The current price of 41.4 is below the 20-day moving average (MA) of 42.35, below the 50-day MA of 41.95, and below the 200-day MA of 46.85, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 44.82 is Neutral, neither overbought nor oversold. The STOCH value of 8.77 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ANDE.
The Andersons Risk Analysis
The Andersons disclosed 22 risk factors in its most recent earnings report. The Andersons reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The Andersons Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $8.29B | 13.29 | 17.01% | 2.45% | -8.95% | 1.35% | |
71 Outperform | $1.42B | 12.60 | 8.61% | 1.83% | -23.68% | 11.84% | |
66 Neutral | $12.16B | 24.89 | 5.53% | 5.50% | -2.00% | -50.02% | |
65 Neutral | $9.61B | 8.97 | 10.95% | 3.79% | -10.78% | -45.77% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
60 Neutral | $21.98B | 12.55 | 7.78% | 4.39% | -9.01% | -43.53% | |
46 Neutral | $3.45B | ― | 4.98% | 4.40% | 3.61% | 94.27% |
* Industrials Sector Average
Performance Comparison
ANDE
The Andersons
41.40
-11.70
-22.03%
ADM
Archer Daniels Midland
45.80
-6.47
-12.38%
BG
Bunge Global
71.71
-17.97
-20.04%
CAG
Conagra Brands
25.39
-1.09
-4.12%
SMG
Scotts Miracle-Gro Company
62.05
-2.24
-3.48%
INGR
Ingredion
129.21
15.81
13.94%
The Andersons Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 1.55% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call for The Andersons presented a mixed outlook. While there were several significant achievements, such as record fourth quarter results in the trade group and ethanol production records in the renewables segment, these were offset by declines in net income and gross profit, as well as challenges in the renewables and nutrient segments. The company's strong cash position and successful integration of Skyland Grain are positive indicators, yet the sentiment remains cautious due to external market pressures and decreased margins.Highlights
Record Fourth Quarter Results in Trade Group
Trade group achieved record fourth quarter pre-tax income, driven by strong harvest execution in eastern grain assets and stable elevation margins, contributing to solid yearly results.
Ethanol Production Records in Renewables Segment
Renewables segment set production records for ethanol, driven by improved yields and lower controllable costs, despite lower board crush margins.
Positive Contribution from Skyland Grain Investment
Mid-fourth quarter investment in Skyland Grain positively impacted the trade's bottom line and is on track to achieve $30-40 million in EBITDA contribution in 2025.
Strong Balance Sheet and Cash Position
The company ended the year with a strong cash position of $562 million and a long-term debt to EBITDA ratio of 1.8 times.
Lowlights
Decrease in Net Income and Gross Profit
Fourth quarter net income decreased from $55 million in 2023 to $47 million in 2024, and gross profit fell from $218 million to $213 million, primarily due to reduced ethanol margins.
Decline in Renewables Segment Earnings
Renewables segment pre-tax income decreased from $33 million in 2023 to $16 million in 2024 due to lower ethanol and co-product market values.
Challenges in Nutrient and Industrial Business
Nutrient and industrial segment faced challenges with limited farmer engagement, contributing to a slight year-over-year increase in pre-tax income.
Company Guidance
During The Andersons' 2024 Fourth Quarter Earnings Conference Call, the company provided several key metrics reflecting their financial performance and outlook. For the year, The Andersons achieved an adjusted pretax income of $147 million and adjusted EBITDA of $363 million. Despite challenging market conditions, they reported net income attributable to the company of $45 million for the fourth quarter, or $1.31 per diluted share, with adjusted net income at $47 million or $1.36 per share. Gross profit for the quarter was $213 million, slightly down from $218 million the previous year, primarily due to a $30 million reduction in renewables. The company's full-year gross profit was $694 million, a 7% decline from 2023, largely because of reduced ethanol margins. The trade segment recorded a record fourth quarter pretax income of $54 million, while the renewables segment reported $16 million in pretax income, despite lower market values. The nutrient and industrial business saw a slight increase in quarterly pretax income to $3 million. The Andersons highlighted strong cash flow generation with a year-end cash position of $562 million, supported by a disciplined approach to capital spending at $149 million for the year, and maintained a long-term debt to EBITDA ratio of 1.8 times. Looking ahead, the company anticipates benefits from increased US corn acreage and continued investment in their renewables segment.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.