AgroFresh Solutions (NASDAQ:AGFS)‘s stock had its “buy” rating restated by investment analysts at National Securities in a research note issued on Friday. They presently have a $2.50 price objective on the basic materials company’s stock. National Securities’ target price indicates a potential upside of 65.56% from the stock’s previous close.
The analysts wrote, “ Second Quarter Results. Revenue of $21.2 million beat consensus estimates of $18.9 million, and represented growth of 15%, and 17% on a constant currency basis, as compared to our low-to-mid single digit growth outlook. Margins held firm and free cash flow improved $0.08 per share.
Debt Outlook. $2.1 million of debt was repaid in the quarter, and on the earnings call management stressed that deleveraging and debt restructuring is its highest priority. We believe the company remains well positioned to deliver roughly $30 million of annual free cash flows in both 2019 and 2020, $40 million of which we believe can be used to improve the $370 million net debt position
Tailwinds Entering Second Half. The Washington apple harvest appears to be poised for a meaningful rebound, with industry estimates up 18% from 2018. While we expected a recovery from a depressed 2018 harvest, this level would exceed our expectations and would represent the largest harvest since 2014. While AGFS has diversified its revenue base, this harvest still represents the single largest second revenue contributor, and given that AGFS products are based on volume we believe this can be a meaningful catalyst for the third and fourth quarters.
Depressed Valuation With Meaningful Upside. While we acknowledge risks from the capital structure, we believe the stock has gone well into oversold territory. Given an improving revenue line with strong and stable margins, we believe the company is strong enough to service and restructure its debt. With multiples based on our 2020 estimates of 6.1x on an EV/EBITDA basis and 2.8x on a P/FCF basis, we believe upside potential outweighs the risks from capital structure.”
A number of other equities analysts have also commented on the stock. ValuEngine upgraded shares of AgroFresh Solutions from a “hold” rating to a “buy” rating in a research report on Thursday, August 1st. Roth Capital started coverage on shares of AgroFresh Solutions in a research report on Tuesday, May 21st. They set a “buy” rating and a $6.00 target price on the stock. Finally, HC Wainwright started coverage on shares of AgroFresh Solutions in a research report on Tuesday, April 16th. They set a “buy” rating and a $5.00 target price on the stock. One investment analyst has rated the stock with a sell rating, one has assigned a hold rating and five have given a buy rating to the company. The stock has a consensus rating of “Buy” and a consensus target price of $5.08.
AgroFresh Solutions (NASDAQ:AGFS) last released its quarterly earnings results on Thursday, August 8th. The basic materials company reported ($0.45) EPS for the quarter, beating the Zacks’ consensus estimate of ($0.50) by $0.05. AgroFresh Solutions had a negative net margin of 18.51% and a negative return on equity of 8.47%. Analysts expect that AgroFresh Solutions will post -0.5 earnings per share for the current fiscal year.
In related news, Director Gregory M. Freiwald bought 49,500 shares of AgroFresh Solutions stock in a transaction dated Tuesday, May 28th. The shares were bought at an average cost of $2.59 per share, for a total transaction of $128,205.00. Following the completion of the transaction, the director now owns 114,339 shares of the company’s stock, valued at $296,138.01. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders have bought 60,000 shares of company stock worth $152,825 over the last quarter. 1.60% of the stock is owned by company insiders.
Hedge funds have recently made changes to their positions in the company. BlackRock Inc. increased its stake in AgroFresh Solutions by 1.5% during the 4th quarter. BlackRock Inc. now owns 1,744,063 shares of the basic materials company’s stock valued at $6,610,000 after purchasing an additional 26,023 shares in the last quarter. Bank of New York Mellon Corp lifted its stake in shares of AgroFresh Solutions by 9.6% during the 4th quarter. Bank of New York Mellon Corp now owns 131,972 shares of the basic materials company’s stock worth $500,000 after purchasing an additional 11,543 shares during the period. Raymond James & Associates acquired a new stake in shares of AgroFresh Solutions during the 4th quarter worth $88,000. Dimensional Fund Advisors LP increased its holdings in shares of AgroFresh Solutions by 12.4% during the 4th quarter. Dimensional Fund Advisors LP now owns 1,010,377 shares of the basic materials company’s stock worth $3,829,000 after buying an additional 111,179 shares during the last quarter. Finally, Geode Capital Management LLC increased its holdings in shares of AgroFresh Solutions by 4.9% during the 4th quarter. Geode Capital Management LLC now owns 305,477 shares of the basic materials company’s stock worth $1,157,000 after buying an additional 14,229 shares during the last quarter. Institutional investors own 82.11% of the company’s stock.
AgroFresh Solutions Company Profile
AgroFresh Solutions, Inc provides data-driven solutions worldwide. The company uses 1-Methylcyclopropene technology, an ethylene action inhibitor to maintain freshness and extend the shelf life of various fresh produce. Its solutions enable growers and packers of fresh produce to preserve and enhance the freshness, quality, and value of fresh produce, including apples, pears, kiwifruit, plums, persimmons avocados, and bananas, as well as flowers.
Featured Article: How to Calculate Compound Annual Growth Rate (CAGR)
Receive News & Ratings for AgroFresh Solutions Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for AgroFresh Solutions and related companies with MarketBeat.com's FREE daily email newsletter.