With solid fundamentals and a recent acquisition of industry titans Precision Extraction and Cascade Biosciences, the future is looking incredibly bright for cannabis ancillary Agrify Corporation (NASDAQ: AGFY). But should you buy Agrify stock?
Indeed, the stock is up 40% this year alone but don’t let that be the deciding factor.
Let’s take a closer look at the technicals and fundamentals for this cannabis stock to determine whether or not Agrify stock is actually a buy.
What is Agrify?
Agrify is a picks and shovels company supporting cultivators grow indoors. They use high tech solutions to help increase profitability and yield to their clients (think LED lights, vertical grow units, and automation software packages). The company calls themselves a “non-plant touching ag-tech company”. They are based in Massachusetts in the USA.
Why do we like cannabis ancillary stocks like Agrify?
At Cannin, we tend to favor cannabis ancillary stocks such as Urban-Gro (URGO) and Innovative Industrial Properties (IIPR). These stocks tend to have stronger fundamentals than the MSOs and it shows. In fact, both IIPR and HYFM are up over 10x since we first recommended them as strong buys. But does this alone make Agrify stock a strong buy?
Follow Stephen Goldman as he evaluates Agrify with the RSI, MACD, and the VWAP
Bottom Line: Should You Buy Agrify Stock?
Agrify is an Ag-Tech company focused on cultivators in the cannabis industry. They provide lights, vertical growing solutions, and software to help growers achieve higher yields and higher margins.
Recently they have had a successful run with the stock almost tripling from around $10 to over $30 during late summer 2021. They’ve rolled out their turnkey solutions with two clients (Bud & Mary’s with 1,200 units and True House Cannabis with 159 vertical farming units) which could generate over $30 million of revenue for them annually once fully operational. They also have ramped up sales with existing customers which has 2021 revenue projections sitting around $50 million.
They are listed on the Nasdaq so they have plenty of liquidity and access to capital, they have recently opened a product showcase in MA, have opened Agrify University to feature their software/hardware integrations, and have signed an R&D partnership with Curaleaf, perhaps the largest MSO in the world.
We think their P/S could be better (high at 17 currently) and they are not quite reporting positive incomes yet, but there are a lot of reasons to like what they’ve done. Their Q2 2021 revenue was up over 200% YoY and it may only take a few more partnerships with major MSO’s to push this stock sky high.
For all these reasons, we believe Agrify stock is a Strong Buy.
Should You Buy Agrify Stock?
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