S&W Seed Company (SANW) AI Stock Analysis

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S&W Seed Company

(NASDAQ:SANW)

Rating:44Neutral

Price Target:

$5.00

▲( 0.00% Upside)

S&W Seed Company's stock is currently facing significant challenges, primarily due to its poor financial performance marked by declining revenue and profitability issues. Technical indicators suggest bearish momentum, while valuation metrics underscore its unprofitability. Although there are strategic initiatives and long-term growth prospects, the immediate outlook remains clouded by external market challenges, such as tariffs impacting revenue and profitability.

Positive Factors

Debt Management

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

$11.09M

Dividend YieldN/A

Average Volume (3M)8.37K

Price to Earnings (P/E)―

Beta (1Y)1.13

Revenue Growth-45.02%

EPS Growth-7.27%

CountryUS

Employees134

SectorConsumer Defensive

Sector Strength69

IndustryAgricultural Farm Products

Share Statistics

EPS (TTM)-0.57

Shares Outstanding2,146,806

10 Day Avg. Volume7,983

30 Day Avg. Volume8,372

Financial Highlights & Ratios

PEG Ratio-0.04

Price to Book (P/B)1.81

Price to Sales (P/S)0.00

P/FCF Ratio22.37

Enterprise Value/Market Cap1.00

Enterprise Value/Revenue0.06

Enterprise Value/Gross Profit1.19

Enterprise Value/Ebitda-0.17

Forecast

1Y Price Target

$25.00

Price Target Upside400.00% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

S&W Seed Company Business Overview & Revenue Model

Company DescriptionS&W Seed Company (SANW) is an agricultural company specializing in the breeding, production, and sale of high-quality seeds. The company focuses primarily on alfalfa, sorghum, and sunflower seeds, catering to agricultural markets worldwide. S&W Seed Company leverages its extensive research and development capabilities to enhance seed genetics, aiming to improve crop yield and resilience.

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 Financial Statement Overview

Summary

S&W Seed Company faces challenges with declining revenue and profitability, reflected in negative margins and net losses. While debt reduction is positive, a low equity ratio indicates financial vulnerability. Improvements in cash flow are notable, but overall financial health requires strategic enhancements.

Income Statement

Neutral

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.

Balance Sheet

Neutral

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.

Cash Flow

Neutral

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.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
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
1.11M	294.01K	3.40M	2.06M	3.53M	4.12M
	Total Assets
143.67M	120.73M	151.99M	133.79M	151.47M	155.96M
	Total Debt
55.91M	52.86M	53.21M	46.69M	47.22M	47.53M
	Net Debt
54.79M	52.56M	49.81M	44.63M	43.69M	43.41M
	Total Liabilities
81.37M	75.69M	83.17M	82.38M	77.08M	74.62M
	Stockholders Equity
62.27M	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

Technical Analysis Sentiment

Negative

Last Price5.00

Price Trends

50DMA

5.92

Negative

100DMA

7.14

Negative

200DMA

5.91

Negative

Market Momentum

MACD

-0.15

Negative

RSI

42.80

Neutral

STOCH

34.73

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SANW, the sentiment is Negative. The current price of 5 is below the 20-day moving average (MA) of 5.30, below the 50-day MA of 5.92, and below the 200-day MA of 5.91, indicating a bearish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 42.80 is Neutral, neither overbought nor oversold. The STOCH value of 34.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 3 New Risks

If we fail to comply or regain compliance with the continued listing standards of the Nasdaq Capital Market, we may be delisted and the price of our common stock, our ability to access the capital markets and our financial condition could be negatively impacted. Q2, 2024

We identified a material weakness in our internal control over financial reporting, and if we are unable to achieve and maintain effective internal control over financial reporting, our ability to produce accurate financial statements on a timely basis could be impaired and our public reporting may be unreliable. Q2, 2024

Logistical challenges could negatively impact our business. Q2, 2024

S&W Seed Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	$8.88B	14.67	4.78%	173.89%	3.39%	2.18%
SDOT	58 Neutral	$7.77M	1.21	26.62%	―	16.65%	―
EDBL	54 Neutral	$5.96M	―	-580.71%	―	-8.72%	94.96%
SANW	44 Neutral	$11.09M	―	-59.79%	―	-45.02%	-7.27%
AQB	43 Neutral	$3.19M	―	-53.80%	―	-46.91%	-174.16%
LOCL	34 Underperform	$24.45M	―	-2448.28%	―	41.44%	-1.20%

* Consumer Defensive Sector Average

Performance Comparison

SANW

S&W Seed Company

5.00

-1.46

-22.60%

AQB

AquaBounty Technologies

0.90

-1.01

-52.88%

SDOT

Sadot Group

1.20

-1.75

-59.32%

LOCL

Local Bounti Corporation

2.14

-0.73

-25.44%

EDBL

Edible Garden AG , Inc.

4.99

-52.51

-91.32%

S&W Seed Company Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q3-2025)

% Change Since: -9.42%|

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 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

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.