Arcadia Biosciences (RKDA) AI Stock Analysis

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Arcadia Biosciences

(NASDAQ:RKDA)

53Neutral

Arcadia Biosciences shows a mixed outlook. Financial challenges, including unprofitability and cash flow issues, weigh heavily on the stock. However, there are positive signs from strong Zola sales and improved cash management. Technical indicators are neutral, and the valuation remains unattractive due to the negative P/E ratio. The positive sentiment from the earnings call suggests potential for future improvement, but significant hurdles remain.

Positive Factors

Asset Development

Roosevelt Resources is believed to be one of the largest CCUS projects in the country, offering more efficient extraction processes than conventional methods.

Earnings

Q4’24 results were ahead of expectations behind Zola coconut water growth of 124% via an 86% distribution increase.

Mergers and Acquisitions

Arcadia's current valuation levels are considered materially depressed relative to a post-merger fair value, making it an attractive option for special situation and/or merger arbitrage investors.

Negative Factors

Investment Risk

The valuation reflects a considerable discount to transaction comps, suggesting a favorable position for Arcadia investors.

Valuation

Arcadia's current valuation levels are considered materially depressed relative to a post-merger fair value.

Arcadia Biosciences (RKDA) vs. S&P 500 (SPY)

Market Cap

$4.81M

Dividend YieldN/A

Average Volume (3M)11.18K

Price to Earnings (P/E)―

Beta (1Y)1.63

Revenue Growth-6.20%

EPS Growth64.07%

CountryUS

Employees9

SectorHealthcare

Sector Strength58

IndustryAgricultural Inputs

Share Statistics

EPS (TTM)-5.16

Shares Outstanding1,367,040

10 Day Avg. Volume18,812

30 Day Avg. Volume11,175

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.83

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit1.92

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$12.00

Price Target Upside240.91% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Arcadia Biosciences Business Overview & Revenue Model

Company DescriptionArcadia Biosciences, Inc. produces and markets plant-based health and wellness products in the United States. It engages in developing crop improvements primarily in wheat to enhance farm economics by improving the performance of crops in the field, as well as their value as food ingredients, health and wellness products, and their viability for industrial applications. The company was incorporated in 2002 and is headquartered in Davis, California.

How the Company Makes MoneyArcadia Biosciences generates revenue primarily through the sale of its proprietary seeds and agricultural traits. The company licenses its technology to other agricultural firms, enabling them to produce crops with enhanced features such as improved nutritional content, resistance to pests and disease, and better adaptability to environmental stresses. Arcadia also forms strategic partnerships and collaborations with other agribusinesses and research institutions to co-develop and commercialize new technologies. Additionally, the company may engage in the sale of agricultural products derived from its proprietary crops. Revenue streams are further supported by government grants and research funding aimed at advancing agricultural innovation.

Arcadia Biosciences Financial Statement Overview

Summary

Arcadia Biosciences is facing financial challenges, particularly with profitability and cash flow generation. Revenue has declined, and the company remains unprofitable, although it has managed to maintain a strong equity position with minimal debt. The company needs to address its operational efficiency and cash flow management to improve its financial stability.

Income Statement

Neutral

Arcadia Biosciences has faced challenges in maintaining revenue growth and profitability. The revenue decreased slightly from $5.33 million in 2023 to $5.045 million in 2024, indicating a revenue decline of approximately 5.35%. The gross profit margin improved slightly, but the company remains unprofitable with a negative net income for the year ending 2024. EBIT and EBITDA margins are also negative, indicating operational challenges.

Balance Sheet

Neutral

The balance sheet shows a moderate level of financial stability with a debt-to-equity ratio of 0.025, indicating low leverage. However, the return on equity remains negative due to consistent net losses. The equity ratio is 46%, indicating a solid equity position relative to total assets.

Cash Flow

Neutral

Arcadia Biosciences experienced substantial free cash flow challenges, with negative free cash flow growth. Operating cash flow to net income ratio is negative, reflecting cash flow difficulties. However, cash flow from investing activities was positive, indicating some level of investment recovery.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.04M	5.33M	9.96M	6.78M	8.03M
	Gross Profit
2.08M	2.03M	154.00K	-1.93M	2.83M
	EBIT
-3.65M	-13.87M	-19.40M	-35.53M	-21.59M
	EBITDA
-3.65M	-13.58M	-13.65M	-23.27M	-5.44M
	Net Income Common Stockholders
-7.04M	-13.98M	-15.61M	-16.13M	-6.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.24M	11.64M	20.64M	28.68M	25.67M
	Total Assets
13.52M	19.70M	28.92M	43.92M	47.35M
	Total Debt
155.00K	1.01M	2.02M	3.29M	9.35M
	Net Debt
-4.09M	-5.51M	-18.63M	-25.39M	-4.69M
	Total Liabilities
7.29M	7.00M	8.02M	12.72M	18.80M
	Stockholders Equity
6.22M	12.84M	21.03M	31.09M	27.73M
Cash Flow		Free Cash Flow
-9.64M	-15.30M	-14.05M	-26.88M	-32.55M
	Operating Cash Flow
-9.63M	-15.29M	-13.98M	-25.87M	-30.22M
	Investing Cash Flow
7.34M	-4.34M	1.42M	16.61M	17.28M
	Financing Cash Flow
9.00K	5.51M	4.52M	21.90M	20.56M

Arcadia Biosciences Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3.52

Price Trends

50DMA

3.31

Positive

100DMA

4.36

Negative

200DMA

3.72

Negative

Market Momentum

MACD

0.05

Negative

RSI

60.17

Neutral

STOCH

62.96

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RKDA, the sentiment is Positive. The current price of 3.52 is above the 20-day moving average (MA) of 3.09, above the 50-day MA of 3.31, and below the 200-day MA of 3.72, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 60.17 is Neutral, neither overbought nor oversold. The STOCH value of 62.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RKDA.

Arcadia Biosciences Risk Analysis

Arcadia Biosciences disclosed 25 risk factors in its most recent earnings report. Arcadia Biosciences 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

Arcadia Biosciences Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RKDA	53 Neutral	$4.81M	―	-60.76%	―	-6.20%	64.07%
XYLO	53 Neutral	$3.88M	―	-68.97%	―	-47.53%	0.67%
Sector *	52 Neutral	$5.36B	3.88	-42.93%	2.87%	17.85%	1.45%
SONN	48 Neutral	$4.17M	―	-285.35%	―	674.14%	89.05%
EVOK	46 Neutral	$4.34M	―	-240.09%	―	97.84%	82.99%
TTNP	34 Underperform	$3.52M	―	-103.63%	―	-100.00%	28.48%
GLTO	29 Underperform	$3.95M	―	-91.62%	―	―	48.81%

* Healthcare Sector Average

Performance Comparison

RKDA

Arcadia Biosciences

3.52

1.56

79.59%

EVOK

Evoke Pharma

3.09

-2.74

-47.00%

SONN

Sonnet BioTherapeutics Holdings

1.36

-13.52

-90.86%

TTNP

Titan Pharmaceuticals

3.75

-3.13

-45.49%

XYLO

Xylo Technologies Ltd

5.19

1.09

26.59%

GLTO

Galecto

2.99

-14.51

-82.91%

Arcadia Biosciences Earnings Call Summary

Earnings Call Date:Mar 20, 2025

(Q4-2024)

% Change Since: 6.67%|

Next Earnings Date:May 08, 2025

Earnings Call Sentiment Positive

The earnings call highlights significant growth in Zola coconut water sales and successful business restructuring, signaling a positive trajectory for Arcadia. However, the decline in GLA oil sales and increased SG&A costs pose challenges. Overall, the positive aspects of Zola's performance and business refocusing outweigh the negatives.

Q4-2024 Updates

Positive Updates

Zola Revenue Growth

Zola revenues increased 124% in Q4 2024 compared to the same period last year. For the full year, Zola sales increased by 46%, driven by significant distribution gains and an 86% growth in retail distribution.

Cash Management and Profitability

Operating cash use decreased by 30% in the second half of 2024 compared to the first half, indicating improved cash management. Gross margins were reported at 41.3% for the year, aligning with previous guidance.

Successful Business Restructuring

Arcadia successfully restructured its business by exiting underperforming Body Care brands and monetizing a portion of its wheat intellectual property portfolio, resulting in a leaner company focused on Zola coconut water products.

Strong Category Performance

Zola's growth outpaced the coconut water category by more than 2:1, with the category growing 18.5% while Zola increased by 38.5% for the full year.

Negative Updates

GLA Oil Sales Decline

GLA oil sales declined by 60% in the second half of 2024 and by 49% for the full year, as Arcadia sold through the remaining inventory and exited this product line.

Increased SG&A and Transaction Costs

SG&A expenses increased to $9.6 million for 2024, up from $8.2 million in 2023, including $2 million of transaction-related costs due to the sale of GoodWheat assets and the pending transaction with Roosevelt Resources.

Company Guidance

During the Arcadia Biosciences Fourth Quarter and Full Year 2024 Financial Results and Business Highlights Conference Call, the company provided guidance illustrating a successful year. Arcadia reported full-year revenues slightly over $5 million, with a gross profit of $2.1 million and gross margins of 41.3%. Despite a higher than anticipated quarterly run rate for R&D and SG&A expenses due to unforeseen transaction-related fees, the company demonstrated significant momentum. Zola coconut water products showcased impressive growth, with sales increasing 46% for the year and 124% in the fourth quarter alone compared to the previous year. This was achieved through expanded distribution, adding over 1,600 new stores, and growing retail distribution by 86%. Zola's growth outpaced the coconut water category by more than double, with gross margins consistent in the low to mid-30% range. Despite challenges, Arcadia maintained strong cash management, reducing operating cash use by 30% in the second half of 2024 compared to the first half, and ended the year with $4.2 million in cash. The call also mentioned ongoing efforts to monetize the remaining wheat intellectual property portfolio and provided updates on a pending transaction with Roosevelt Resources expected to conclude by the end of Q2 2025.

Arcadia Biosciences Corporate Events

M&A TransactionsBusiness Operations and Strategy

Arcadia Biosciences Plans Merger with Roosevelt Resources

Neutral

Dec 11, 2024

Arcadia Biosciences announced a proposed all-stock business combination with Roosevelt Resources, a Texas-based partnership. This transaction aims to enhance their operational capabilities, with potential impacts on their market positioning and stakeholder interests. The companies held a webcast to discuss the transaction, which involves significant risks and uncertainties that could affect the final outcome. The success of the deal depends on several factors, including shareholder approvals and integration challenges.

M&A TransactionsBusiness Operations and Strategy

Arcadia Biosciences Merges with Roosevelt Resources

Positive

Dec 6, 2024

Arcadia Biosciences and Roosevelt Resources have agreed to merge in an all-stock deal, making Roosevelt the majority shareholder. This strategic move aims to capitalize on Roosevelt’s vast oil and gas assets, particularly its carbon capture and storage project in Texas. The merger promises to enhance shareholder value and streamline operations, with Roosevelt’s experienced management leading the combined entity. The transaction is expected to close by Q1 2025, pending regulatory and shareholder approvals.

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.