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Earnings: AppHarvest Misses Consensus But Hits 2022 Guidance

AppHarvest Q2 2022 Results indoor ag stocks

AppHarvest, Inc. (NASDAQ: APPH, APPHW) has announced its financial and operating results for Q4 2022 and the entire year missing on earnings. The company achieved its revised guidance and quadrupled its farm network in 2022 while diversifying its crop portfolio. With the significant infrastructure, AppHarvest expects to triple its net sales year-over-year in 2023. AppHarvest recorded Q4 net sales of $4.5 million compared to $3.1 million in Q4 2021, showing an increase of 45%. The company also achieved net sales of $14.6 million compared to $9.1 million in the prior year, representing a 60% increase year-over-year. In addition, AppHarvest delivered on its commitment to quadruple its farm network in 2022, and the company is expected to grow nearly 1.5 million tomato plants across the combined 120 acres.

The company’s net loss was $93.3 million, and non-GAAP Adjusted EBITDA loss was $24.1 million in the fourth quarter. This is compared to a net loss of $88.4 million and a non-GAAP Adjusted EBITDA loss of $18.3 million in the prior year. For the full year 2022, AppHarvest achieved non-GAAP Adjusted EBITDA loss within its revised guidance range, with a non-GAAP Adjusted EBITDA loss of $72.0 million versus a prior outlook of non-GAAP Adjusted EBITDA loss in the range of $67.0 million to $72.0 million. AppHarvest expects to spend approximately $60 million to $65 million in 2023. In addition, the company secured non-dilutive financing in 2022, including $50 million in USDA-guaranteed loans for AppHarvest Somerset. The company also completed a $127 million sale-leaseback of its Berea, Ky., indoor salad greens facility as a source of non-dilutive capital in December. With these results, AppHarvest plans to focus on operations to optimize production, revenue, and costs across the four-farm network under Project New Leaf, the company’s strategic program focused on profitability.

AppHarvest Misses Earnings Consensus and Faces Investor Exodus as Stock Price Plummets by 80%

AppHarvest reported earnings for the fourth quarter and fiscal year 2022 that missed market consensus. The company reported earnings per share of -86 cents for Q4, below the expected range of -46 to -32 cents. Similarly, for the fiscal year 2022, AppHarvest reported earnings per share of -1.69, missing the market consensus estimate of -1.17 by 44.44%. While sales were in line with estimates, the disappointing earnings results caused concern among investors and led to a significant decline in the company’s stock price.

The poor performance of AppHarvest in 2022 caused many institutional investors to dump their shares, with Norges Bank Investment Management being the largest seller, divesting 68% of its shares. Despite this, BNP Paribas and Jane Street Capital acquired shares, purchasing 1.2M and 1.4M, respectively. Barclays maintained an Equal-Weight rating for AppHarvest but lowered its price target from $2 to $1.25. As a result, the stock price performance decreased by more than 80% over 2022, leaving many investors worried about the company’s future prospects.

Image provided by AppHarvest

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