AGP starts Agrify at buy; PT $32


Alliance Global Partners initiated coverage of Agrify (NASDAQ:AGFY) with a “buy” rating and $32 price target. The stock closed at $16 on Oct. 29.

“We see Agrify as an ancillary play on cannabis with the company’s vertical farm units (VFUs) providing an improved controlled growing environment within each pod,” writes analyst Aaron Grey. 

Mr. Grey said the ability to “dial-in specific settings (lighting, humidity, etc.) and cultivate consistent products are key to building brand, in our view, and the company’s Agrify Insights SaaS data allow Agrify and VFU users to capture data from the grow cycle, providing a database of knowledge for grow tactics of various strains.” 

While the company is unprofitable today, “we see Agrify as building the platform through its low-margin hardware sales to generate long-term sales from SaaS fees and total turnkey performance-based fees, which should equate to a sticky high-margin business in time,” he added.