Farmers Edge Inc.(FDGE:TSX) CIBC lowers the target price to $1

by: Gillian Lawrence
Farmers Edge Inc.

CIBC maintains Farmers Edge Inc with a Neutral rating and lowers the target price to $1 from $3 on the company’s stock.

Based on the Farmers Edge Inc stock forecasts from 5 analysts, the average analyst target price for Farmers Edge Inc is CAD 3.13 over the next 12 months. Farmers Edge Inc’s average analyst rating is Hold . Stock Target Advisor’s own stock analysis of Farmers Edge Inc is Bearish, which is based on 2 positive signals and 5 negative signals. At the last closing, Farmers Edge Inc’s stock price was CAD 0.98Farmers Edge Inc’s stock price has changed by -12.50% over the past week, -26.87% over the past month and -77.83% over the last year.

Farmers Edge Inc. develops digital agriculture solutions in Canada, the United States, Brazil, Australia, Russia, and Ukraine. It offers FarmCommand, a cloud-based analytics software platform that provides real-time monitoring, alerts, predictive models, and outcome-based data recommendations offered through web-based platform, mobile app, and universal terminal. The Company sells its platform solutions through a network of channel partners comprising crop input manufacturers and retailers, seed and crop protection companies, equipment manufacturers, grain companies, insurance companies and agencies, and food manufacturers. It also offers crop insurance and carbon offset products; and satellite imagery solutions that provides field-level insights for broadacre crops. Farmers Edge Inc. was founded in 2005 and is headquartered in Winnipeg, Canada.

What we like:

Underpriced compared to book value

The stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Low debt

The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Poor risk adjusted returns

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Negative cashflow

The company had negative total cash flow in the most recent four quarters.

Negative free cash flow

The company had negative total free cash flow in the most recent four quarters.

Disclaimer

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