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S&W Seed (SANW)
:SANW
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S&W Seed Company
(NASDAQ:SANW)
Rating:52Neutral
Price Target:
$5.50
▼(-1.79%Downside)
Positive Factors
Debt Reduction
The company ended with net debt at the lowest level since 2014, after exiting its Australian business and improving working capital.
Financial Position
The company is in its best financial position in its history as a public company, thanks to improved EBITDA and financial flexibility.
Strategic Review
The strategic review process is expected to unlock significant value, making the business highly compelling to investors.
Negative Factors
Market Overlook
Long-term guidance for the sorghum portfolio suggests a very achievable growth rate and margin expansion, which the market currently overlooks.
S&W Seed Company (SANW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.07M
Dividend YieldN/A
Average Volume (3M)7.53K
Price to Earnings (P/E)―
Beta (1Y)1.08
Revenue Growth-45.02%
EPS Growth-7.27%
CountryUS
Employees134
SectorConsumer Defensive
Sector Strength63
IndustryAgricultural Farm Products
Share Statistics
EPS (TTM)-0.57
Shares Outstanding2,146,806
10 Day Avg. Volume4,317
30 Day Avg. Volume7,527
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)0.72
Price to Sales (P/S)0.00
P/FCF Ratio-2.48
Enterprise Value/Market Cap8.24
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit10.68
Enterprise Value/Ebitda-1.57
Forecast
1Y Price Target
$25.00Price Target Upside346.43% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
S&W Seed Company Business Overview & Revenue Model
Company DescriptionS&W Seed Company, an agricultural company, engages in breeding, growing, processing, and selling alfalfa and sorghum seeds. It also offers sunflower, wheat germplasm, wheat, and pasture seeds. The company sells its seeds to distributors and dealers in 40 countries. S&W Seed Company was founded in 1980 and is headquartered in Longmont, Colorado.
How the Company Makes MoneyS&W Seed Company generates revenue through the sale of its seed products to farmers, distributors, and agricultural companies. The company's key revenue streams include the commercialization of proprietary seed varieties, licensing of seed genetics, and sales of conventional and genetically modified seeds. S&W Seed Company also benefits from strategic partnerships and collaborations with agricultural research institutions and seed technology companies, which enhance its product offerings and market reach. Additionally, the company may earn revenue through government and private contracts, providing seeds for specific agricultural projects and initiatives.
S&W Seed Company Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q3-2025)
| % Change Since: 1.45%|
Next Earnings Date:Sep 24, 2025
Earnings Call Sentiment Negative
The earnings call reflects a challenging period for S&W Seed Company, with positive strides in operational efficiency and product development overshadowed by the significant negative impact of tariffs on the US sorghum market. While there are strong long-term prospects for new product lines, current market disruptions have led to a downward revision of financial performance expectations.Q3-2025 Updates
Positive Updates
First Positive Adjusted EBITDA in Many Years
S&W Seed Company reported its first positive adjusted EBITDA quarter in many years, reflecting successful cost-saving initiatives and improved operational efficiencies.
Significant Gross Margin Improvement
Gross profit margin for Q3 was 37.7%, up from 24.6% in Q3 of the previous year, driven by better lifecycle management and a shift to higher-margin products.
Successful Strategic Actions
Completion of the VA process in Australia and the establishment of a $25 million working capital facility. These actions have helped focus the company on high-margin operations in the Americas.
Strong Customer Response to New Products
The new Prussic Acid Free trait was successfully launched and sold out, indicating strong market demand and potential for future growth.
Negative Updates
Impact of Tariffs on Revenue and Outlook
The announcement and implementation of tariffs on US sorghum exports to China have significantly impacted the US sorghum market, leading to a revised revenue outlook for the fiscal year.
Adjusted EBITDA Forecast Revised Downward
Due to the impact of tariffs, the full-year adjusted EBITDA is now expected to be between negative $8.5 million and negative $7 million, down from previous guidance.
Decrease in Sorghum Sales Due to Tariffs
US sorghum exports to China dropped dramatically due to tariffs, leading to increased US sorghum inventories and lower farm gate prices.
Reduced Operating Expenses Still Insufficient
Despite significant reductions in operating expenses, the company is still projecting negative EBITDA due to the revenue shortfall.
Company Guidance
During the third quarter fiscal year 2025 conference call, S&W Seed Company provided key metrics and guidance for the remainder of the fiscal year. The company reported revenue of $9.5 million for the quarter, with a positive adjusted EBITDA of $244,000, marking their first positive EBITDA quarter in several years. However, due to the tariffs imposed by China on U.S. sorghum, S&W revised its full-year revenue expectation to $29 million to $31 million, down from the previous $34.5 million to $38 million, and adjusted EBITDA guidance to negative $8.5 million to negative $7 million. The company's gross margins improved to 37.7% from 24.6% in the same quarter last year, driven by operational efficiencies and higher-margin products. Despite the near-term challenges, S&W remains optimistic about their long-term outlook for the sorghum market, aiming for a market share of 10% to 12% this year and projecting a potential increase to 25% to 30% over the next eight years. They continue to focus on strategic initiatives, including their high-margin Double Team sorghum solutions and the new Prussic Acid Free solution, to navigate the challenges and drive future growth.S&W Seed Company Financial Statement Overview
Summary
S&W Seed Company is facing significant financial challenges, with declining revenue and negative profit margins indicating a lack of profitability. The balance sheet shows some improvement in debt reduction, but the low equity ratio is concerning. While cash flow has improved, the overall financial health remains fragile, requiring strategic improvements.Income Statement
S&W Seed Company has experienced significant revenue decline from 2021 to the TTM period, indicating a negative growth trajectory with a revenue drop of approximately 37.5% from 2021 to TTM. The gross profit margin for the TTM is relatively low at 24.6%, and the net profit margin is negative due to substantial net losses. This suggests challenges in achieving profitability. The negative EBIT and EBITDA margins further highlight operational inefficiencies.45
Neutral
Balance Sheet
The company's debt-to-equity ratio improved in the TTM as total debt decreased significantly, indicating reduced financial leverage. However, the equity ratio is low at 8.8%, suggesting limited equity relative to total assets. The return on equity is negative due to net losses, which is concerning for long-term sustainability. The balance sheet shows some improvement in equity but remains vulnerable with high liabilities.50
Neutral
Cash Flow
Free cash flow has improved significantly from a negative position in previous years to a positive $497,701 in the TTM, indicating better cash management. Operating cash flow to net income ratio is positive in the TTM, showing improved cash generation relative to net losses. However, the free cash flow to net income ratio remains low, reflecting ongoing challenges in converting earnings into free cash flow.55
Neutral
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 37.76M | 60.44M | 73.52M | 71.35M | 84.05M | 79.58M | Gross Profit |
| 9.30M | 15.81M | 14.54M | 6.36M | 13.68M | 14.93M | EBIT |
| -13.48M | -17.69M | -17.94M | -31.29M | -22.18M | -16.83M | EBITDA |
| -15.72M | -15.01M | 25.85M | -27.34M | -10.69M | -11.80M | Net Income Common Stockholders |
| -32.37M | -30.03M | 14.41M | -36.32M | -19.11M | -19.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 354.50K | 294.01K | 3.40M | 2.06M | 3.53M | 4.12M | Total Assets |
| 69.61M | 120.73M | 151.99M | 133.79M | 151.47M | 155.96M | Total Debt |
| 283.53K | 52.86M | 53.21M | 46.69M | 47.22M | 47.53M | Net Debt |
| -70.96K | 52.56M | 49.81M | 44.63M | 43.69M | 43.41M | Total Liabilities |
| 36.64M | 75.69M | 83.17M | 82.38M | 77.08M | 74.62M | Stockholders Equity |
| 6.16M | 39.22M | 68.76M | 51.37M | 74.42M | 81.46M |
| Cash Flow | Free Cash Flow | ||||
| 497.70K | -7.18M | -20.01M | -20.47M | -15.30M | -7.74M | Operating Cash Flow |
| 1.03M | -5.64M | -18.98M | -18.37M | -14.22M | -5.76M | Investing Cash Flow |
| -62.84K | 5.88M | 8.37M | -909.43K | 2.47M | -10.29M | Financing Cash Flow |
| 649.78K | -3.35M | 11.95M | 17.14M | 10.89M | 17.05M |
S&W Seed Company Technical Analysis
Positive
5.60
Price Trends
5.38
Positive
6.79
Negative
5.88
Negative
Market Momentum
0.03
Negative
51.36
Neutral
39.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SANW, the sentiment is Positive. The current price of 5.6 is above the 20-day moving average (MA) of 5.48, above the 50-day MA of 5.38, and below the 200-day MA of 5.88, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 51.36 is Neutral, neither overbought nor oversold. The STOCH value of 39.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SANW.
S&W Seed Company Risk Analysis
S&W Seed Company disclosed 48 risk factors in its most recent earnings report. S&W Seed Company 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
S&W Seed Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $8.92B | 15.03 | 4.68% | 6.11% | 3.59% | -2.49% | |
61 Neutral | $7.21M | 1.44 | 26.62% | ― | 16.65% | ― | |
52 Neutral | $12.07M | ― | -59.79% | ― | -45.02% | -7.27% | |
50 Neutral | $5.13M | ― | -580.71% | ― | -8.72% | 94.96% | |
43 Neutral | $3.41M | ― | -53.80% | ― | -46.91% | -174.16% | |
42 Neutral | $21.83M | ― | -2448.28% | ― | 41.44% | -1.20% |
* Consumer Defensive Sector Average
Performance Comparison
SANW
S&W Seed Company
5.60
0.63
12.68%
AQB
AquaBounty Technologies
0.91
-0.84
-48.00%
SDOT
Sadot Group
1.47
-1.25
-45.96%
LOCL
Local Bounti Corporation
2.00
-0.97
-32.66%
EDBL
Edible Garden AG , Inc.
3.07
-36.43
-92.23%
S&W Seed Company Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
S&W Seed Projects Strong Growth in Sorghum Sales
Positive
Jan 24, 2025
S&W Seed Company has provided financial guidance indicating a significant growth trajectory for its sorghum sales, projecting a rise from $24.0 to $27.5 million in fiscal 2025 to $80.0 to $90.0 million by fiscal 2033. The company plans to launch new sorghum products, including Double Team (DT2™) forage sorghum and Prussic Acid Free (PF™) grain sorghum, in the coming years, which is expected to increase its U.S. market share from 10-12% in fiscal 2025 to 25-30% in fiscal 2033. This expansion reflects a strategic effort to solidify its position in the sorghum market, leveraging non-GAAP financial measures to provide insightful business performance analysis.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.