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S&W Seed (SANW)
:SANW
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S&W Seed Company
(NASDAQ:SANW)
36Underperform
Positive Factors
Financial Performance
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 Cap Issues
The Australian business has been the largest contributor to S&W’s legacy of hemorrhaging market cap.
Stock Price Decline
Shares have gone down 50%+ over the past six weeks, driven by a filing delay and reverse split.
S&W Seed Company (SANW) vs. S&P 500 (SPY)
Market Cap
$9.83M
Dividend YieldN/A
Average Volume (3M)6.31K
Price to Earnings (P/E)―
Beta (1Y)1.23
Revenue Growth-31.59%
EPS Growth-350.70%
CountryUS
Employees134
SectorConsumer Defensive
Sector Strength94
IndustryAgricultural Farm Products
Share Statistics
EPS (TTM)-13.48
Shares Outstanding2,145,132
10 Day Avg. Volume5,782
30 Day Avg. Volume6,312
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.39
Price to Cash Flow (P/CF)1.30
P/FCF Ratio1.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$35.00Price Target Upside641.53% 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, including alfalfa, sorghum, and sunflower seeds. The company collaborates with agricultural distributors and directly sells to farmers, leveraging its extensive distribution network. Revenue is driven by the demand for high-quality seeds that enhance productivity and sustainability, with key revenue streams originating from both domestic and international markets. Strategic partnerships with research institutions and agricultural companies further bolster product development and market reach, contributing to the company's earnings.
S&W Seed Company Financial Statement Overview
Summary
S&W Seed Company faces significant financial challenges characterized by declining revenue, high leverage, and negative cash flows. The company needs to focus on improving revenue growth, optimizing costs, and strengthening its balance sheet to enhance financial stability and investor confidence.Income Statement
The income statement shows a negative trajectory with declining revenues and profitability metrics. The TTM (Trailing-Twelve-Months) revenue has decreased compared to the previous year, and there are significant losses with negative EBIT and net income, indicating operational struggles. Gross profit margin is positive, but net profit margin is deeply negative, suggesting issues with cost management and revenue generation.35
Negative
Balance Sheet
The balance sheet reveals significant liabilities compared to equity, with a low equity ratio, indicating financial risk. The debt-to-equity ratio is high, which could imply potential solvency issues. Stockholders' equity has decreased, reflecting financial instability. Cash reserves are minimal, posing liquidity risks.40
Negative
Cash Flow
The cash flow statement highlights ongoing negative free cash flow and operating cash flow, pointing to cash management challenges. Despite some investing cash inflows, the company struggles to generate positive operational cash flows, impacting its ability to sustain operations without external financing.30
Negative
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 46.53M | 60.44M | 73.52M | 71.35M | 84.05M | 79.58M | Gross Profit |
| 10.19M | 15.81M | 14.54M | 6.36M | 13.68M | 14.93M | EBIT |
| -18.22M | -17.69M | -17.94M | -31.29M | -22.18M | -16.83M | EBITDA |
| -16.23M | -15.01M | 25.85M | -27.34M | -10.69M | -11.80M | Net Income Common Stockholders |
| -39.37M | -30.03M | 14.41M | -36.32M | -19.11M | -19.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 357.93K | 294.01K | 3.40M | 2.06M | 3.53M | 4.12M | Total Assets |
| 8.24M | 120.73M | 151.99M | 133.79M | 151.47M | 155.96M | Total Debt |
| 3.23M | 52.86M | 53.21M | 46.69M | 47.22M | 47.53M | Net Debt |
| 2.87M | 52.56M | 49.81M | 44.63M | 43.69M | 43.41M | Total Liabilities |
| 6.27M | 75.69M | 83.17M | 82.38M | 77.08M | 74.62M | Stockholders Equity |
| 1.96M | 39.22M | 68.76M | 51.37M | 74.42M | 81.46M |
| Cash Flow | Free Cash Flow | ||||
| -2.38M | -7.18M | -20.01M | -20.47M | -15.30M | -7.74M | Operating Cash Flow |
| -1.71M | -5.64M | -18.98M | -18.37M | -14.22M | -5.76M | Investing Cash Flow |
| 6.75M | 5.88M | 8.37M | -909.43K | 2.47M | -10.29M | Financing Cash Flow |
| -3.29M | -3.35M | 11.95M | 17.14M | 10.89M | 17.05M |
S&W Seed Company Technical Analysis
Negative
4.72
Price Trends
6.99
Negative
7.31
Negative
6.04
Negative
Market Momentum
-0.75
Positive
31.50
Neutral
14.12
Positive
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 4.72 is below the 20-day moving average (MA) of 5.69, below the 50-day MA of 6.99, and below the 200-day MA of 6.04, indicating a bearish trend. The MACD of -0.75 indicates Positive momentum. The RSI at 31.50 is Neutral, neither overbought nor oversold. The STOCH value of 14.12 is Positive, 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 0 New Risks
S&W Seed Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $9.37B | 14.87 | 4.61% | 187.28% | 3.96% | 6.52% | |
59 Neutral | $9.68M | 2.15 | 23.53% | ― | -3.54% | ― | |
47 Neutral | $24.46M | ― | -2448.28% | ― | 38.40% | 9.06% | |
37 Underperform | $2.73M | ― | -580.71% | ― | -1.37% | 79.50% | |
36 Underperform | $9.83M | ― | -61.92% | ― | -31.59% | -350.70% | |
33 Underperform | $2.44M | ― | -53.80% | ― | -46.91% | -174.16% |
* Consumer Defensive Sector Average
Performance Comparison
SANW
S&W Seed Company
4.72
-3.25
-40.78%
AQB
AquaBounty Technologies
0.62
-1.23
-66.49%
SDOT
Sadot Group
1.68
-1.03
-38.01%
LOCL
Local Bounti Corporation
2.18
-0.82
-27.33%
AGRI
AgriFORCE Growing Systems
2.15
-13.21
-86.00%
EDBL
Edible Garden AG , Inc.
1.89
-153.61
-98.78%
S&W Seed Company Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -47.61% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a focus on strategic repositioning towards high-value crops and operational improvements, indicating a strong long-term growth potential. However, the significant decline in Q2 revenue and negative EBITDA, along with potential market challenges, suggest a cautious near-term outlook.Highlights
Successful Repositioning and Strategic Partnerships
S&W Seed Company has focused on high-value crops such as sorghum and Camelina for growth and profitability. Successfully completed the VA process in Australia, secured a new $25 million working capital facility with Mountain Ridge, and entered a biofuels partnership with Shell for Camelina.
Sorghum Market Share and Growth Potential
S&W Seed Company has achieved a 10% to 12% market share of the US grain sorghum acres and aims to capture 25% to 30% over the next eight years, translating to $70 million to $78 million in sales with gross margins of 76% to 81%.
Operational Improvements
The company improved gross margins, reduced breakeven rates, and improved inventory management, leading to closer profitability without raising equity capital.
Positive Long-Term Outlook
Sorghum market expected to grow consistently with CAGRs of 16% to 18% over the next decade, driven by a strong R&D pipeline and established commercial model.
Guidance for Fiscal 2025
For fiscal 2025, S&W Seed Company expects total revenue between $34.5 million and $38 million, with global sorghum revenue projected at $24 million to $27.5 million.
Lowlights
Revenue Decline
Q2 revenue dropped to $5.1 million from $8.3 million the previous year, largely due to a decrease in Double Team sorghum sales and absence of ex-US international revenue.
Negative Adjusted EBITDA
Adjusted EBITDA for Q2 was negative $2.9 million, compared to negative $1.1 million in the previous year, with a six-month figure of negative $6 million.
Potential Market Challenges
Concerns over tariffs, alternative crop prices, and geopolitical factors could impact sorghum sales and market dynamics.
Increased Operating Expenses
Operating expenses for Q2 were $6.2 million, up from $5.7 million the previous year, partly due to nonrecurring costs related to voluntary administration.
Company Guidance
During the call, S&W Seed Company provided guidance for fiscal year 2025, projecting total revenue between $34.5 million and $38 million. Specifically, global sorghum sales are expected to range from $24 million to $27.5 million, with Double Team contributing $12 million to $14.5 million. The company anticipates achieving a gross profit margin between 33% and 36% for the year. Operating expenses, excluding depreciation, amortization, stock-based compensation, and one-time charges, are projected at $16.5 million. Additionally, S&W forecasts positive adjusted EBITDA of $1 million to $3 million in the second half of the fiscal year, despite reporting a negative $6 million adjusted EBITDA for the first half. The company is also focused on reducing its inventory levels by 40% to 50% to improve working capital efficiency.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.