Farmland (FPI) AI Stock Analysis

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Farmland

(NYSE:FPI)

69Neutral

Farmland Partners shows strong financial performance with low leverage and robust cash flow generation. Valuation metrics suggest the stock is attractively priced. However, technical analysis indicates bearish trends, and challenges highlighted in the earnings call, such as increased expenses and market-specific issues, may pose short-term risks.

Farmland (FPI) vs. S&P 500 (SPY)

Market Cap

$466.75M

Dividend Yield2.43%

Average Volume (3M)404.41K

Price to Earnings (P/E)9.8

Beta (1Y)0.57

Revenue Growth1.32%

EPS Growth108.94%

CountryUS

Employees23

SectorReal Estate

Sector Strength77

IndustryREIT - Specialty

Share Statistics

EPS (TTM)1.01

Shares Outstanding45,990,383

10 Day Avg. Volume445,415

30 Day Avg. Volume404,413

Financial Highlights & Ratios

PEG Ratio0.09

Price to Book (P/B)N/A

Price to Sales (P/S)8.63

Price to Cash Flow (P/CF)8.60

P/FCF Ratio9.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$13.25

Price Target Upside33.97% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Farmland Business Overview & Revenue Model

Company DescriptionFarmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns approximately 155,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.

How the Company Makes MoneyFarmland Partners Inc. generates revenue primarily through the leasing of its farmland properties to independent farmers, who pay rent for the use of the land. This rent can be structured as fixed cash rents or variable rents that are tied to the profitability of the crops grown. Additionally, FPI may earn income from participating in crop share agreements where it receives a percentage of the revenue from the sale of crops. The company also seeks to increase its earnings by acquiring additional farmland and benefiting from appreciation in land values. FPI's revenue model is further supported by strategic partnerships and alliances with agricultural operators and stakeholders, enhancing its ability to manage and optimize its farmland assets effectively.

Farmland Financial Statement Overview

Summary

Farmland demonstrates solid financial health with strong profitability and low leverage, positioning it well within the REITs industry. The company shows robust cash flow generation with positive growth trends, although attention should be given to improving EBIT margins and overall returns on equity.

Income Statement

Positive

The company has shown a consistent revenue growth with the latest annual report showing a 1.32% increase from the previous year. The net profit margin is strong at 102.87%, indicating high profitability, although the negative EBIT margin of -2.64% is a concern. The EBITDA margin is favorable at 14.75%, showing good cash earnings relative to revenue.

Balance Sheet

Positive

The balance sheet reflects a very low debt-to-equity ratio of 0.0004, indicating minimal leverage, which is positive for financial stability. The equity ratio stands at 56.94%, suggesting a strong equity base. However, the return on equity (ROE) at 12.11% could be improved to enhance shareholder returns.

Cash Flow

Positive

Operating cash flow to net income ratio is healthy at 0.27, suggesting strong cash conversion. Free cash flow has grown by 25.26% year-over-year, indicating improved financial flexibility. However, reliance on financing activities could pose future risks if not managed carefully.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
58.23M	57.47M	61.21M	51.74M	50.69M
	Gross Profit
46.92M	44.05M	47.05M	42.88M	39.95M
	EBIT
-1.54M	31.50M	24.97M	16.79M	22.33M
	EBITDA
85.88M	60.90M	32.10M	33.82M	30.31M
	Net Income Common Stockholders
59.91M	30.91M	11.67M	-6.05M	-10.45M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
78.44M	5.49M	7.65M	30.17M	27.22M
	Total Assets
868.56M	1.02B	1.16B	1.12B	1.09B
	Total Debt
194.00K	361.26M	437.20M	511.43M	506.72M
	Net Debt
-78.25M	355.77M	429.55M	481.26M	479.50M
	Total Liabilities
272.00M	391.19M	455.94M	528.94M	645.31M
	Stockholders Equity
494.59M	515.88M	580.79M	458.31M	429.84M
Cash Flow		Free Cash Flow
16.14M	12.89M	12.80M	5.14M	17.07M
	Operating Cash Flow
16.14M	12.89M	17.05M	7.86M	19.73M
	Investing Cash Flow
268.75M	158.46M	-60.40M	-18.77M	18.67M
	Financing Cash Flow
-211.94M	-173.51M	20.83M	13.87M	-23.74M

Farmland Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.89

Price Trends

50DMA

11.01

Negative

100DMA

11.21

Negative

200DMA

10.47

Negative

Market Momentum

MACD

-0.33

Positive

RSI

33.68

Neutral

STOCH

29.69

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FPI, the sentiment is Negative. The current price of 9.89 is below the 20-day moving average (MA) of 10.45, below the 50-day MA of 11.01, and below the 200-day MA of 10.47, indicating a bearish trend. The MACD of -0.33 indicates Positive momentum. The RSI at 33.68 is Neutral, neither overbought nor oversold. The STOCH value of 29.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FPI.

Farmland Risk Analysis

Farmland disclosed 62 risk factors in its most recent earnings report. Farmland reported the most risks in the “Finance & Corporate” category.

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

Latest Risks Added 0 New Risks

Farmland Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RYN	70 Outperform	$3.89B	10.41	19.79%	4.58%	19.50%	106.12%
FPI	69 Neutral	$466.75M	9.81	11.91%	2.43%	1.32%	108.94%
PCH	62 Neutral	$3.02B	138.96	1.04%	4.70%	3.71%	-64.41%
Sector *	59 Neutral	$2.72B	11.53	0.09%	8679.99%	5.56%	-16.50%
WY	59 Neutral	$17.92B	45.45	3.97%	3.28%	-7.17%	-52.62%

* Real Estate Sector Average

Performance Comparison

FPI

Farmland

9.89

0.22

2.28%

PCH

PotlatchDeltic

39.30

-0.44

-1.11%

RYN

Rayonier

24.92

-2.53

-9.22%

Weyerhaeuser

25.26

-5.45

-17.75%

Farmland Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -14.59% | Next Earnings Date: May 6, 2025

Earnings Call Sentiment Neutral

The earnings call presented a balanced view with significant highlights such as strong asset sales, debt reduction, and increased AFFO, but also noted some lowlights including decreased fixed farm rent, increased G&A expenses, and challenges in the California farmland market.

Highlights

Substantial Asset Sales and Special Dividend

Farmland Partners completed significant asset sales, resulting in high gains and distributed a $1.15 special dividend to shareholders.

Debt Reduction and Interest Expense Savings

The company reduced outstanding debt by $158.5 million, which lowered interest expenses and contributed to financial stability.

Increased AFFO and Net Income

AFFO for 2024 was $14.1 million, or $0.29 per share, significantly higher than 2023. Net income was $61.5 million, or $1.19 per share.

Successful Lease Renewals and Increased Variable Farm Rents

Strong lease renewals and increased variable farm rents boosted revenue, alongside direct operation revenue from specialty crops.

Guidance for 2025 Above Current Dividend Rate

AFFO per share guidance for 2025 is between $0.25 and $0.30, which is above the current dividend rate of $0.24.

Lowlights

Decreased Fixed Farm Rent

Fixed farm rent decreased due to dispositions in 2023, although partially offset by strong lease renewal rates.

General and Administrative Expenses Increase

G&A expenses increased due to a $1.4 million severance expense and a $2.1 million special bonus to executive officers.

Challenges in California Farmland Market

The California farmland market remains dislocated with issues such as water availability and overplanting, affecting asset values.

Flat to Slightly Down Lease Renewal Rates

Lease renewal rates were slightly down by 0.8% for 2024, reflecting a plateau in land values and rents.

Concerns Over USDA Funding Programs

Potential funding freezes in USDA programs could impact farmers, but Farmland Partners has limited exposure to these risks.

Company Guidance

During the Farmland Partners Q4 and fiscal year 2024 earnings call, several key metrics were highlighted as part of the company's guidance for 2025. The company expects Adjusted Funds from Operations (AFFO) per share to be between $0.25 and $0.30, surpassing the current dividend rate of $0.24 per share. The guidance reflects a focus on increasing rents, particularly from specialty crop farms, and reducing costs, which have been driving revenue and AFFO higher. The company has also successfully reduced its indebtedness by $158.5 million and engaged in stock buybacks, which have contributed to a significant reduction in interest expenses. Additionally, Farmland Partners reported a net income of $61.5 million for 2024, or $1.19 per share available to common stockholders, and an AFFO of $14.1 million, or $0.29 per weighted average share. The guidance suggests a continued focus on maintaining financial health and delivering value to shareholders in the coming year.

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.