Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) Stock Analysis

Company Overview

Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria operates as a diversified agricultural entity primarily engaged in the production of agricultural commodities within Brazil and other Latin American countries, while also managing urban properties and investments. The company functions within the Industrials sector and the Conglomerates industry, indicating a broad operational scope that spans multiple business verticals rather than focusing on a single niche product line. Its financial scale is substantial, evidenced by a market capitalization of $855.45M and reported annual revenue of $1.02T, though specific employee count data is not currently available in the provided records. These valuation and revenue figures suggest the company commands a significant position in its regional markets, reflecting a large asset base that supports its diversified operational model across agricultural and real estate segments.

Financial Health

The entity reports a trailing twelve-month revenue of $1.02T with a corresponding net income of $195.70B and an EBITDA of $205.69B. The substantial gap between the $1.02T revenue figure and the $195.70B net income reveals a cost structure where operating expenses, taxes, and interest obligations consume approximately 80.8% of total sales, leaving a robust but calculated profit margin. However, the free cash flow stands at $-180,016,742,400, indicating a significant cash outflow that limits immediate financial flexibility for capital expenditures or debt reduction despite the high accounting profits. The company maintains a gross margin of 41.4%, an operating margin of 24.3%, and a profit margin of 19.2%, which collectively demonstrate efficient cost management relative to revenue generation but also highlight the heavy burden of non-operating costs or depreciation. On the balance sheet, total cash holdings of $720.09B are significantly lower than the total debt obligation of $2.05T, resulting in a debt-to-equity ratio of 78.53% that classifies the financial position as highly leveraged rather than conservative. The current ratio of 1.43 suggests the company holds sufficient current assets to cover its short-term liabilities, providing a baseline for liquidity management. Furthermore, the return on equity is 21.0% while the return on assets is 2.3%, revealing that the company generates high returns relative to shareholder equity but produces minimal returns on the total asset base due to the massive scale of its debt and asset holdings.

Valuation Assessment

The trailing P/E ratio is 5.62, while the forward P/E is 115.14, a stark disparity that implies the market expects a dramatic increase in future earnings or is pricing in significant volatility that current performance does not yet reflect. The price-to-book ratio stands at 9.80, indicating that the market values the company at a substantial premium over its tangible book value, likely driven by the intangible value of its agricultural operations and land assets. Alternative valuation metrics show a price-to-sales ratio of 0.00 and an EV/EBITDA of 13.80, suggesting that traditional sales-based comparisons are not applicable due to the revenue structure, while the EV/EBITDA points to a moderate valuation relative to its earnings power before interest and taxes. The 52-week high is $14.21 and the 52-week low is $8.19, placing the current trading environment within a specific historical range that defines the recent price action for this stock. The beta value of 0.20 indicates that the stock exhibits low volatility relative to the broader market, moving significantly less than the market average during periods of equity market turbulence.

Growth & Income

The company demonstrates a revenue growth rate of 20.3% year-over-year alongside an earnings growth rate of 182.3% year-over-year. The earnings growth rate is expanding at a pace nearly nine times faster than the revenue growth rate, which implies a potential inflection point in profitability, operational leverage, or a change in the composition of earnings that decouples profit growth from top-line expansion. As a dividend payer, the company offers a dividend yield of 5.2% with a payout ratio of 30.8%, a combination that suggests the dividend is highly sustainable given that the payout consumes less than one-third of the available net income. This low payout ratio provides ample room for the company to maintain the dividend even if earnings fluctuate, allowing for a consistent income stream for shareholders. Overall, the growth and income profile presents a scenario of accelerating profitability supported by a high-yield, sustainable dividend structure within a low-volatility asset class.