Arcadia Biosciences (NASDAQ:RKDA) had its target price upped by National Securities from $12.00 to $20.00 in a report released on Thursday. The firm currently has a buy rating on the basic materials company’s stock.
“ Second Quarter Results Meet Expectations. A $5.0 million operating loss fell in line with our $4.8 million estimates. GAAP earnings were skewed by a $9.5 million non-cash gain from warrant adjustments. Excluding this, earnings fell in line with estimates.
Cannabis Initiative Taking Off. The story of the earnings release was surprisingly not what has driven volume in recent days. The cannabis initiative is accelerating faster than we anticipated, with the company now expecting to derive near term revenue from sale of seed. We estimate this high margin product could conservatively deliver $3 to $5 million of revenue in 2020, with modest initial revenues coming in the fourth quarter of 2019.
HB4 Approved By USDA. On August 8th, the USDA announced its approval of the HB4 soybean to be grown domestically. This is a meaningful milestone and came 12 to 24 months before we anticipated. RKDA can now identify a commercial partner and integrate the trait into domestic germplasm with field trials likely to begin in 2021 and commercial revenue in 2023. While this is a faster timeline than we expected, it does not significantly alter our estimates or valuation.
Cannabis Value Still In Early Innings. We believe the most valuable revenue in agribusiness is derived from proprietary genetics, and we believe the most valuable crop in the market is cannabis. RKDA is engaged in breeding efforts to develop proprietary lines of cannabis, which we believe is a roughly 3 year process before commercialization can begin. For patient investors, we believe RKDA is in the process of generating significant value via these efforts, and we expect enhanced visibility of this potential over the next 12 to 24 months.,” National Securities’ analyst commented.
RKDA has been the subject of several other research reports. ValuEngine downgraded shares of Arcadia Biosciences from a hold rating to a sell rating in a report on Thursday. HC Wainwright reaffirmed a buy rating on shares of Arcadia Biosciences in a report on Monday, August 12th.
A number of institutional investors have recently modified their holdings of RKDA. Citadel Advisors LLC bought a new position in Arcadia Biosciences in the 2nd quarter worth $32,000. Cambridge Investment Research Advisors Inc. bought a new position in shares of Arcadia Biosciences during the 2nd quarter valued at about $34,000. Morgan Stanley boosted its holdings in shares of Arcadia Biosciences by 162,800.0% during the 2nd quarter. Morgan Stanley now owns 81,450 shares of the basic materials company’s stock valued at $250,000 after purchasing an additional 81,400 shares during the last quarter. Vanguard Group Inc. boosted its holdings in shares of Arcadia Biosciences by 47.1% during the 2nd quarter. Vanguard Group Inc. now owns 117,059 shares of the basic materials company’s stock valued at $359,000 after purchasing an additional 37,472 shares during the last quarter. Finally, CVI Holdings LLC bought a new position in shares of Arcadia Biosciences during the 2nd quarter valued at about $414,000. 3.11% of the stock is owned by institutional investors.
About Arcadia Biosciences
Arcadia Biosciences, Inc, an agricultural food ingredient company, develops and commercializes health and nutrition ingredient traits worldwide. The company offers a suite of agricultural productivity traits, including nitrogen use efficiency, water use efficiency and drought tolerance, salinity tolerance, and herbicide tolerance traits.
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