American Vanguard (AVD) AI Stock Analysis

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American Vanguard

(NYSE:AVD)

55Neutral

American Vanguard's stock is currently under pressure due to financial performance challenges, with negative earnings and declining revenues. The technical analysis indicates bearish trends, and the valuation is weak due to poor profitability. However, potential positives include cash flow improvements, strategic leadership changes, and growth in specific business segments, which offer room for optimism if the company successfully navigates its challenges.

Positive Factors

Debt Reduction

Accelerated debt reduction as net debt declined $26M from $193M ending Q2’24 to $167M ending Q3’24.

EBITDA Improvement

American Vanguard's internal efforts are expected to drive over 20% improvement in EBITDA and significantly reduce leverage.

Revenue Growth

Revenue is expected to return to previous levels after isolated headwinds, with improvements in gross margin and operating leverage anticipated.

Negative Factors

Audit Delay

The Q4’24 release was preliminary only given an expected brief delay in the year-end audit.

Peer Challenges

Shares have been sliding following tariff threats and results from peers.

Tariff Threats

Shares have been sliding due to tariff threats and results from peers, which analyst believes are overanalyzed.

American Vanguard (AVD) vs. S&P 500 (SPY)

Market Cap

$108.24M

Dividend Yield3.19%

Average Volume (3M)261.53K

Price to Earnings (P/E)―

Beta (1Y)0.95

Revenue Growth-2.35%

EPS Growth-782.69%

CountryUS

Employees845

SectorBasic Materials

Sector Strength58

IndustryAgricultural Inputs

Share Statistics

EPS (TTM)-1.03

Shares Outstanding28,787,828

10 Day Avg. Volume228,513

30 Day Avg. Volume261,526

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.24

Price to Cash Flow (P/CF)1.20

P/FCF Ratio1.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$14.00

Price Target Upside272.34% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

American Vanguard Business Overview & Revenue Model

Company DescriptionAmerican Vanguard Corporation (AVD) is a diversified specialty and agricultural products company. The company primarily operates in the agricultural sector, providing crop protection products, such as herbicides, insecticides, and fungicides, which serve to enhance and protect agricultural productivity. American Vanguard also engages in the production of specialty chemicals and biological products for various markets, including turf and ornamental applications, as well as public health.

How the Company Makes MoneyAmerican Vanguard makes money by manufacturing and distributing crop protection and specialty products primarily to the agricultural industry. Its revenue model is based on the sale of chemical and biological products that improve crop yields and protect against pests and diseases. Key revenue streams include sales of herbicides, insecticides, and fungicides to farmers, distributors, and agricultural retailers. The company also generates revenue through its specialty chemicals division, which caters to niche markets such as turf and ornamentals and public health sectors. Strategic partnerships with other companies for distribution and technology development may also contribute to its earnings, although specific partnerships are not detailed here.

American Vanguard Financial Statement Overview

Summary

American Vanguard shows financial challenges with negative earnings and revenue decline in the TTM period. The balance sheet indicates moderate leverage and some stability, while cash flow improvements provide a positive aspect. Overall, financial performance is mixed, with a need for enhanced revenue growth and profitability.

Income Statement

Neutral

The income statement reflects a challenging year for American Vanguard with a negative EBIT and net income in the TTM period. The gross profit margin stands at 26.9%, indicating some profitability at the gross level. However, declining revenue and negative net profit margin of -5.2% highlight operational inefficiencies and market challenges. Despite previous years of revenue growth, the recent period shows a contraction.

Balance Sheet

Positive

The balance sheet shows a moderately leveraged position with a debt-to-equity ratio of 0.61. The company maintains a reasonable equity ratio of 43.2%, suggesting some financial stability. However, the decrease in stockholders' equity over the TTM period signals potential challenges in maintaining financial health.

Cash Flow

Neutral

Cash flow analysis indicates a positive free cash flow in the TTM period, showing improvement from previous negative values. The operating cash flow to net income ratio is robust, suggesting good cash generation relative to net income. However, financing activities show significant cash outflow, which could impact future liquidity.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
553.84M	579.37M	609.62M	556.87M	458.70M	468.19M
	Gross Profit
148.84M	179.16M	241.35M	213.24M	172.59M	177.35M
	EBIT
-19.45M	23.30M	40.65M	30.95M	23.63M	26.22M
	EBITDA
2.71M	45.08M	66.36M	53.41M	38.87M	48.85M
	Net Income Common Stockholders
-28.93M	7.52M	27.40M	18.59M	15.24M	13.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.52M	11.42M	20.33M	16.29M	15.92M	6.58M
	Total Assets
269.91M	767.55M	726.31M	694.16M	667.18M	670.10M
	Total Debt
70.81M	162.09M	76.25M	78.08M	119.81M	160.17M
	Net Debt
69.29M	150.68M	55.92M	61.79M	103.88M	153.59M
	Total Liabilities
114.37M	397.54M	356.33M	321.42M	306.45M	325.94M
	Stockholders Equity
155.53M	370.01M	369.98M	372.74M	360.74M	344.16M
Cash Flow		Free Cash Flow
48.44M	-70.81M	42.55M	77.28M	77.95M	-3.58M
	Operating Cash Flow
57.26M	-58.75M	57.10M	87.32M	89.20M	9.40M
	Investing Cash Flow
-14.25M	-17.02M	-14.47M	-20.04M	-35.80M	-54.84M
	Financing Cash Flow
-43.12M	66.74M	-38.26M	-65.87M	-43.21M	46.41M

American Vanguard Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.76

Price Trends

50DMA

4.85

Negative

100DMA

5.09

Negative

200DMA

5.83

Negative

Market Momentum

MACD

-0.18

Negative

RSI

41.76

Neutral

STOCH

26.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVD, the sentiment is Negative. The current price of 3.76 is below the 20-day moving average (MA) of 4.25, below the 50-day MA of 4.85, and below the 200-day MA of 5.83, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 41.76 is Neutral, neither overbought nor oversold. The STOCH value of 26.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVD.

American Vanguard Risk Analysis

American Vanguard disclosed 31 risk factors in its most recent earnings report. American Vanguard reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

American Vanguard Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CF	78 Outperform	$11.99B	10.68	22.76%	2.78%	-10.48%	-13.78%
MOS	64 Neutral	$8.18B	47.32	1.47%	3.29%	-18.79%	-84.24%
FMC	63 Neutral	$4.53B	13.37	9.02%	6.25%	-5.36%	-74.25%
AVD	55 Neutral	$108.24M	―	-8.43%	3.19%	-2.35%	-782.69%
Sector *	47 Neutral	$2.49B	-2.97	-22.82%	3.51%	4.13%	-28.53%
SMG	45 Neutral	$2.94B	―	4.98%	5.16%	3.61%	94.27%
CMP	43 Neutral	$425.83M	―	-42.75%	1.61%	-7.25%	-2202.65%

* Basic Materials Sector Average

Performance Comparison

AVD

American Vanguard

3.76

-7.81

-67.50%

Cf Industries Holdings

72.00

-4.14

-5.44%

CMP

Compass Minerals International

10.74

-2.98

-21.72%

FMC

37.10

-17.15

-31.61%

MOS

Mosaic Co

25.81

-4.17

-13.91%

SMG

Scotts Miracle-Gro Company

51.19

-14.93

-22.58%

American Vanguard Earnings Call Summary

Earnings Call Date: Mar 14, 2025 | % Change Since: -20.00% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted some positive aspects, such as achieving EBITDA targets, reducing debt, and a promising outlook for 2025. However, these were tempered by revenue declines, significant one-time charges, and delays in financial filings. Moreover, market uncertainty and cautious customer sentiment due to potential tariffs add challenges. Overall, the sentiment is cautiously optimistic but recognizes significant hurdles that need to be addressed.

Highlights

Achievement of 2024 EBITDA Target

American Vanguard achieved their 2024 adjusted EBITDA target with approximately $42 million, reflecting a 7.5% margin.

Debt Reduction

The company was able to pay down $22 million in debt during the fourth quarter, focusing on improving its balance sheet.

Positive Future Outlook

The company anticipates an adjusted EBITDA target range of $45 million to $52 million for 2025, with sales expected to be between $565 million and $585 million.

Cost-Cutting and Efficiency Improvements

American Vanguard is implementing organizational restructuring and modern management techniques to improve margins and simplify operations.

Lowlights

Decrease in Revenue and EBITDA

Fourth quarter revenues decreased by 2%, and adjusted EBITDA decreased by 18% compared to the fourth quarter of 2023.

Significant One-Time Charges

In total, $118 million of nonrecurring charges were recorded in 2024, including asset impairments and transformation projects.

Delay in Financial Filing

The company anticipates a delay in filing the audited 10-K due to complicated assessments required related to write-downs.

Cautious Market Sentiment

Growers remain conservative in their buying patterns due to uncertainty about tariffs and the high cost of capital.

Company Guidance

During the American Vanguard Fourth Quarter Earnings Review Conference Call, CEO Dak Kaye provided guidance for 2025, highlighting an adjusted EBITDA target range of $45 million to $52 million and anticipated sales between $565 million and $585 million. The company expects capital expenditures of approximately $10 million, with plans to allocate free cash flow towards debt reduction. In 2024, American Vanguard reported an adjusted EBITDA of $42 million, achieving a margin of 7.5%. Kaye outlined the goal of reaching double-digit EBITDA growth over the next three to four years by simplifying operations, prioritizing key initiatives, and improving margins. The company also sets its sights on reducing inventory levels, moving from 1.67 inventory turns in 2024 to about 2 turns by the end of 2025. Additionally, American Vanguard recorded $118 million in nonrecurring charges in 2024, as part of its broader strategy to reposition the company for long-term growth and profitability.

American Vanguard Corporate Events

Executive/Board Changes

American Vanguard Announces Board Changes with New Appointment

Neutral

Dec 13, 2024

American Vanguard announced the retirement of Debra Edwards from its board of directors and her replacement by Carmen Tiu, effective December 11, 2024. Ms. Edwards served on the board since 2011 and was involved in committees including Risk and Finance, while Ms. Tiu brings extensive experience from Dow AgroSciences and Corteva AgroSciences, adding valuable expertise in regulatory strategy and strategic business initiatives to the board.

Executive/Board ChangesBusiness Operations and Strategy

American Vanguard Appoints New CEO to Lead Growth

Positive

Dec 6, 2024

American Vanguard Corporation has announced the appointment of Douglas A. Kaye III as its new CEO, effective December 9, 2024. With a wealth of experience from his previous roles at Albaugh LLC, Kaye is expected to drive the company’s transformation towards increased efficiency and profitability. As American Vanguard expands its global operations, Kaye’s leadership is anticipated to enhance growth and strengthen customer relationships, aligning with the company’s strategic goals.

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.