Breaking Down The Andersons, Inc. (ANDE) Financial Health: Key Insights for Investors

You're looking at The Andersons, Inc. and seeing a classic mixed signal: revenue is up, but profitability is defintely under pressure, so what's the real story for the rest of 2025? The third quarter results, released in November 2025, showed total revenue climbing to $2.68 billion, a modest 2.2% bump, but net income attributable to the company fell sharply to just $20.14 million, representing a nearly 49.3% year-over-year decline on an unadjusted basis. This big drop in profit highlights the tension between challenging agricultural fundamentals-like oversupplied grain markets-and the powerful tailwinds from the Renewables segment, which benefited from a $9 million net company impact of 45Z tax credits. We're tracking the full-year analyst consensus revenue forecast of $11.60 billion against an expected adjusted net income of around $85.25 million; that gap between top-line growth and bottom-line volatility is exactly what you need to understand before making your next move.

Revenue Analysis

You need to know where The Andersons, Inc. (ANDE) is actually making its money, and the simple answer is that it remains a commodity giant, but the mix is changing. For the trailing twelve months (TTM) ending mid-2025, the company's total revenue stood at approximately $11.53 billion, showing a modest year-over-year increase of about 2.5% compared to the 2024 full-year revenue of $11.25 billion. This small gain is a welcome stabilization after the significant volatility of the past few years, which saw a sharp revenue drop of 23.68% in 2024 alone. The company's revenue is defintely sensitive to global commodity price swings and trade flows.

Breakdown of Primary Revenue Sources

The Andersons, Inc. operates primarily across two major segments: Agribusiness and Renewables. The Agribusiness segment, which now combines the former Trade and Nutrient & Industrial businesses, is the clear revenue driver. This segment focuses on commodity merchandising (grain trading), terminal grain elevator operations, and the distribution of agricultural inputs like primary nutrients and specialty fertilizers. The Renewables segment, on the other hand, is centered on producing, purchasing, and selling ethanol and its co-products.

Honesty, Agribusiness is the backbone, but Renewables is a critical growth lever. Here's the quick math on how the segments contributed to the total sales and merchandising revenues of approximately $3.14 billion in Q2 2025:

• Agribusiness: Contributed about $2.41 billion, representing roughly 77.0% of the total Q2 2025 revenue.
• Renewables: Contributed about $721 million, making up approximately 23.0% of the total Q2 2025 revenue.

For a deeper dive into the company's long-term vision that guides these segments, you should check their Mission Statement, Vision, & Core Values of The Andersons, Inc. (ANDE).

Shifts and Trends in Segment Performance

The near-term revenue story for The Andersons, Inc. is one of divergent performance. In the first half of 2025, the Renewables segment showed considerable strength. For example, in Q1 2025, the segment's pretax income attributable to the company rose to $15 million, up from $14 million in Q1 2024, driven by efficient operations and favorable ethanol margins. This segment is well-positioned to capitalize on increasing demand for renewable energy and low-carbon initiatives.

But, the Agribusiness segment faced headwinds. Global trade uncertainty, particularly from threatened tariffs and trade disputes, disrupted typical grain flows, which pressured profit margins in the early part of 2025. This resulted in the Agribusiness segment recording a pretax loss of $10 million in Q1 2025. Still, management expects an improved second half of 2025, anticipating stronger fertilizer demand from expected increases in U.S. corn acreage and better merchandising opportunities later in the year. The company's diversified portfolio helps buffer against the volatility inherent in commodity markets.

Here is a snapshot of the Q2 2025 sales and merchandising revenues compared to the prior year, showing the growth in both core segments:

Finance: draft a quarterly report comparing Agribusiness and Renewables revenue growth to their respective commodity price indices by Friday.

Profitability Metrics

You need to know if The Andersons, Inc. (ANDE) is actually making money and how efficiently they do it, especially in a tough commodity environment. The direct takeaway is that while the margins are thin, which is typical for agribusiness, the company shows signs of operational improvement, particularly in its gross margin and Renewables segment, which is a key signal for investors.

The Andersons, Inc. operates in a high-volume, low-margin business, so we need to look past the large revenue numbers to the core profitability ratios. For the third quarter of 2025, the company reported a Gross Profit of $170.872 million on revenues that increased slightly from the prior year. This translates to a calculated Gross Profit Margin of approximately 6.45%. This is an improvement over the full-year 2023 Gross Margin of 5.1%, suggesting better cost of goods sold (COGS) management or favorable pricing in specific segments, defintely a positive trend.

• Gross Margin: Improving, hitting around 6.45% in Q3 2025.
• Net Margin: Thin, but stable at around 1.09% in Q3 2025.
• Operational Efficiency: Supported by strong Renewables performance.

When you drill down to the bottom line, the adjusted figures give a clearer picture of core business performance. The Adjusted Net Income (net profit) attributable to The Andersons, Inc. for Q3 2025 was $29 million, which calculates to an Adjusted Net Profit Margin of roughly 1.09% (assuming Q3 revenue of $2.65 billion). That's a low-single-digit margin, but that's the reality of the commodity trading and processing space. The company's focus on operational efficiency is evident in its Q3 2025 Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $78 million, which is a key measure of cash-level operating performance.

Here's the quick math on how The Andersons, Inc. stacks up against the broader market and its own history:

The company's profitability is currently right in line with the industry, which is facing a challenging 2025 with tight margins due to low commodity prices and high input costs. The Andersons, Inc.'s trailing Price-to-Earnings (P/E) ratio of 23.01 is slightly above the industry average of 22, suggesting the market is baking in some expectation of future earnings growth, likely driven by the strength in the Renewables segment and the non-taxable 45Z clean fuel production credits, which are expected to keep the full-year adjusted effective tax rate in the 15% to 18% range. The management's continued emphasis on operational efficiency, like improving ethanol and co-product yields, is critical to maintaining this slight edge.

If you want to dive deeper into the balance sheet and valuation, you can read the full analysis at Breaking Down The Andersons, Inc. (ANDE) Financial Health: Key Insights for Investors. Finance: Calculate the projected full-year 2025 Operating Margin based on the Q1 and Q3 results by the end of the week.

Debt vs. Equity Structure

The Andersons, Inc. (ANDE) has been managing its capital structure with a clear bias toward equity, keeping its debt-to-equity (D/E) ratio comfortably below the industry benchmark. This is a sign of financial discipline, which is defintely reassuring in a volatile agricultural cycle.

As of the most recent quarters in 2025, The Andersons, Inc. (ANDE)'s total debt-to-equity ratio sits at approximately 0.63, or 63.41%. To put that in perspective, the average for the broader Agricultural Inputs industry in November 2025 is around 0.75. This means the company finances less of its assets with debt compared to its peers, giving it a solid buffer against market downturns.

Current Debt Levels and Leverage

The company's total debt load is manageable, especially when viewed against its earnings. Total debt for the most recent quarter was reported at approximately $775.51 million. More importantly, the long-term debt is well-controlled relative to its cash flow generation (earnings before interest, taxes, depreciation, and amortization, or EBITDA).

For the trailing twelve months ending in mid-2025, The Andersons, Inc. (ANDE)'s long-term debt-to-EBITDA ratio was approximately 1.9x, and around 2x as of the third quarter of 2025. This is significantly below the company's stated long-term target of less than 2.5x. That's a strong signal about their ability to service their long-term obligations.

• Total Debt (MRQ): $775.51 million.
• Long-term Debt-to-EBITDA (Q3 2025): Approximately 2x.
• Total Borrowing Capacity (September 2025): $2,052.4 million.

Short-term debt is a different animal in this sector. The Andersons, Inc. (ANDE), like many grain and commodity traders, is typically in a net short-term borrowing position in the first half of the year to fund working capital needs like purchasing inventory. The good news is their readily marketable grain inventories are reported to be well in excess of their short-term debt, which provides a natural hedge for that seasonal debt.

Financing Strategy: Debt, Equity, and Recent Moves

The company's approach to funding growth is a careful mix of debt capacity and strategic equity use. While they maintain a large credit facility-with about $1,908.5 million available for borrowing as of September 30, 2025-they recently leaned heavily on equity-like funding for a major strategic move.

A key financing activity in the first nine months of 2025 was the $425.0 million cash outlay to purchase the remaining noncontrolling interest in their ethanol plants (TAMH). This was a significant use of cash in financing activities, totaling $538.0 million for the nine months ended September 30, 2025, and it was an equity-driven move to consolidate ownership and capture all future Renewables segment profits. This is a smart way to use capital for strategic growth without piling on new debt.

The credit market views this stability with caution, however, as evidenced by Weiss Ratings reaffirming a 'Hold (C)' rating on the stock in October 2025. This suggests that while the balance sheet is healthy, the underlying business fundamentals in the current agricultural environment still present risks.

You can review the strategic alignment of these capital decisions with the company's long-term goals here: Mission Statement, Vision, & Core Values of The Andersons, Inc. (ANDE).

Here's the quick math on their leverage compared to peers:

The takeaway is clear: The Andersons, Inc. (ANDE) has financial flexibility and is positioned to absorb shocks or fund new opportunities without immediate distress. Your action should be to monitor their upcoming capital expenditure guidance, which is expected to be around $200 million for 2025, to see if they continue to prioritize growth projects over debt reduction.

Liquidity and Solvency

The Andersons, Inc. (ANDE) maintains a solid, though cyclical, liquidity position, which is typical for a company heavily involved in agribusiness and commodity merchandising. Your immediate takeaway should be that while the company's current ratio is healthy, its quick ratio is lower, signaling a reliance on inventory-specifically grain-to cover short-term debts. We need to look past the raw numbers to the underlying cash flow dynamics.

As of a recent measure in 2025, The Andersons, Inc. reported a Current Ratio of approximately 2.01 and a Quick Ratio of 1.30. To be fair, the nature of the business means a significant portion of current assets is readily marketable grain inventory, which is highly liquid. Still, the quick ratio, which excludes inventory, is lower, underscoring the importance of that inventory turnover. For context, the Q1 2025 Current Ratio was 1.65.

Here's the quick math on their core liquidity metrics:

Analysis of working capital trends reveals a consistent pattern: the agricultural cycle dictates a significant use of cash in the first quarter, followed by stronger generation later in the year. For instance, in the first quarter of 2025, the company used cash from operating activities of $350 million, which the CFO noted is typical due to working capital needs. However, cash flow from operations before changes in working capital was positive, coming in at $57 million in Q1 2025 and rising to $68 million in Q3 2025. This shows the underlying business is defintely generating cash, but the timing of commodity purchases and sales creates those quarterly swings.

Looking at the cash flow statement for the first half of 2025, we see the following trends (amounts in thousands):

• Operating Cash Flow (CFO): Q1 2025 was a use of ($350,020), but Q2 2025 flipped to a source of $299,321. This confirms the seasonal funding requirement and subsequent recovery.
• Investing Cash Flow (CFI): This has been a consistent use of cash, totaling ($43,831) in Q1 and ($31,876) in Q2 2025. This is primarily driven by capital expenditures, which were $47 million in Q1 2025 and are expected to reach approximately $200 million for the full year, signaling investment in growth projects like the Port of Houston expansion.
• Financing Cash Flow (CFF): Q1 2025 was a source of $50,445, but Q2 2025 was a use of ($137,453). The Q2 use was mainly due to net debt repayments, while Q1 saw net borrowings, illustrating their active debt management to fund working capital and growth.

The primary strength here is solvency. The Andersons, Inc. ended Q1 2025 with a long-term debt to adjusted EBITDA ratio of approximately 1.8 times, which is comfortably below their stated target of less than 2.5 times. Plus, management has repeatedly stated that their readily marketable grain inventories are well in excess of their short-term debt, providing a natural, liquid buffer against market volatility. You can dig deeper into the company's full financial picture by checking out Breaking Down The Andersons, Inc. (ANDE) Financial Health: Key Insights for Investors.

The biggest potential liquidity concern is the reliance on short-term debt to bridge the working capital cycle, but the strong underlying cash generation and low leverage ratio mitigate this risk substantially. The company's ability to generate cash flow from operations before working capital changes is the key metric to watch, and it remains strong. Finance: monitor the Q4 2025 working capital change to confirm the typical year-end cash generation pattern.

Valuation Analysis

The Andersons, Inc. (ANDE) presents a classic valuation puzzle: relatively cheap on a Price-to-Book (P/B) basis, but potentially overvalued by a Discounted Cash Flow (DCF) model. As of November 2025, the stock trades around $49.28, which is a significant premium to some fundamental models, but its core valuation ratios are generally in line with or below its peers, suggesting a fair-to-low valuation on a relative basis.

Honestly, you have to look past the sticker price. The DCF fair value estimate is a stark low of $17.76, suggesting the stock is overvalued by over 176%, but this estimate often struggles with the cyclical nature of commodity businesses like The Andersons, Inc. Here's the quick math on the key relative valuation multiples, which I find more useful for a company in the Food Distribution and Agriculture sector.

The P/B ratio of just 1.0x is defintely the most compelling argument for the stock being undervalued, as it implies the market is valuing the company's equity at its tangible balance sheet value. Plus, the P/E of 21.54x is well below its historical decade average, which suggests the current price reflects a more normalized earnings environment.

Stock Price Momentum and Analyst View

The stock has shown strong momentum over the last 12 months, climbing significantly from its 52-week low of $31.03 to recently hitting a high of $51.89. This 67% run-up from the low shows a clear market appreciation for the company's performance, which included beating Q3 2025 earnings per share (EPS) estimates with $0.84 versus the $0.46 consensus. That's a huge beat, and it drove the price action.

The analyst community is generally positive, with a consensus rating of Moderate Buy. The average 12-month price target is $53.33, which suggests a modest upside from the current price, but it's not a screaming buy. To be fair, two analysts rate it a 'Buy' and two a 'Hold,' so the conviction isn't unanimous. The risk is that a significant part of the recent rally is already priced in, making the near-term upside limited unless earnings continue to surprise.

Dividend Sustainability and Yield

For income-focused investors, The Andersons, Inc. offers a sustainable dividend. The current annual dividend is $0.78 per share, translating to a yield of approximately 1.5%. What's more important is the safety of that payout.

• Annual Dividend: $0.78 per share
• Current Yield: ~1.5%
• Payout Ratio: 36.45% of earnings
• Growth Streak: The company has increased its dividend for 28 consecutive years.

A payout ratio of 36.45% is very healthy and sustainable, well below the 75% threshold that would raise concerns. The 28-year dividend growth streak is a powerful signal of management's commitment to returning capital, even through commodity cycles. This stability provides a solid floor for the stock, even if the valuation multiples are stretched by the DCF model.

For a deeper dive into the balance sheet and operational performance, you should read the full analysis at Breaking Down The Andersons, Inc. (ANDE) Financial Health: Key Insights for Investors. Finance: Track the stock's movement relative to the $53.33 target over the next quarter.

Risk Factors

You're looking at The Andersons, Inc. (ANDE) and seeing mixed signals-strong Renewables performance but a clear pullback in Agribusiness. This is the classic challenge in commodity-driven businesses: volatility is the only constant. While management is executing a smart strategy, investors must map the near-term risks that drove the Q3 2025 results, especially the sharp drop in profitability.

The company's net income fell by 49.3% to $26.07 million in Q3 2025, even with revenue growth to $2.68 billion. This decline highlights how external market and operational pressures can quickly erode margins. Honestly, the Agribusiness segment is the main source of current stress.

External Risks: Market Volatility and Policy Shifts

The biggest risks for The Andersons, Inc. (ANDE) are largely external, stemming from the global commodity markets and the regulatory environment. These factors are tough to control, so the focus shifts to how well the company can trade around them.

• Commodity Price Volatility: Lower overall commodity prices and trade policy uncertainty led to reduced gross profit in the grain assets and merchandising businesses. The Agribusiness segment's pretax income attributable to ANDE fell sharply to just $2 million in Q3 2025, down from $23 million in the prior year period.
• Input Cost Inflation: The Renewables segment, while strong, still faced higher corn basis and increased natural gas costs, which contributed to lower overall margins. This is a constant squeeze; you can't fully escape rising input costs.
• Regulatory Dependency (Biofuels): The Renewables segment is benefiting from a favorable biofuels policy landscape, including the 45Z tax credits, which provided $20 million in year-to-date 2025 tax credits. Any change to this federal support would defintely hit future earnings hard.

Operational and Strategic Headwinds

Internally, the challenge is to execute the growth strategy while navigating the weak agricultural cycle. The Agribusiness segment remains in a trough due to abundant domestic supply, which limits export trade flows for some commodities.

Here's a quick look at the operational reality in Q3 2025:

The 19.6% drop in total Adjusted EBITDA shows that the Renewables strength couldn't fully offset the Agribusiness weakness. That's the core operational risk right now.

Mitigation Strategies and Actionable Takeaways

The Andersons, Inc. (ANDE) isn't sitting still; they are actively working to build a more resilient business model. Their strategy is two-pronged: operational efficiency and strategic expansion.

• Strategic Investment: The company is making a $200 million capital investment to enhance ethanol production efficiency and reduce carbon intensity, positioning the Renewables segment for long-term strength and better positioning for future low-carbon fuel markets.
• Acquisition and Expansion: The completion of the Skyland Grain acquisition and the progression of strategic projects like the Houston port expansion are designed to expand the company's footprint and diversify its grain and merchandising assets, making it less reliant on a single region or commodity.
• Financial Discipline: Despite the tough market, the balance sheet is strong. Readily marketable inventories (RMI) continue to significantly exceed short-term debt, and the long-term debt to adjusted EBITDA ratio remains below the target of 2.5 times. Strong liquidity gives them flexibility for future growth and weathering downturns.

The key takeaway is that management is using operational efficiency and strategic M&A to counteract the cyclical nature of the Agribusiness segment. For a deeper understanding of the company's long-term vision, you should review their Mission Statement, Vision, & Core Values of The Andersons, Inc. (ANDE).

Growth Opportunities

You're looking for a clear path forward for The Andersons, Inc. (ANDE), especially with the volatility in agricultural markets. The direct takeaway is that their future growth is heavily weighted toward the Renewables segment, specifically capitalizing on new clean fuel incentives, while the Agribusiness segment focuses on integrating recent acquisitions to drive operational efficiency.

The core of their near-term opportunity is the strategic shift to maximize their ethanol production footprint. They completed the acquisition of the remaining minority interest in their ethanol plants in the second quarter of 2025, giving them full control to drive efficiency and growth. This is a smart move, and it positions them perfectly to capture the significant benefits from the Inflation Reduction Act's Section 45Z clean fuel production tax credits (a federal incentive for low-carbon fuel production).

Future Revenue and Earnings Outlook

Wall Street analysts are projecting a solid financial picture for the 2025 fiscal year, even with the challenging market conditions in the Agribusiness segment. Here's the quick math on what the consensus points to:

• Revenue Projection: Analysts forecast The Andersons, Inc. (ANDE) will generate approximately $11,595,817,000 in revenue for the full 2025 fiscal year.
• Earnings Estimate: Consensus earnings for 2025 are projected to be around $85,254,286.
• Growth Rate: The forecast annual revenue growth rate of 6.41% is actually expected to beat the US Food Distribution industry's average forecast growth rate of 4.2%.

To be fair, the earnings growth rate of 17.18% is below the industry average, but it reflects the current reality of margin pressure in the core agricultural commodities business. The Renewables segment is defintely the earnings engine right now, with year-to-date 2025 45Z tax credits already amounting to $20.2 million.

Strategic Drivers and Competitive Edge

The company is not just waiting for the market to turn; they are executing clear, actionable initiatives. The Renewables segment is investing capital to increase yields for both ethanol and corn oil-a clear product innovation focus that drives margin. Plus, they expect record ethanol export volumes in 2025, which supports continued strong demand.

In Agribusiness, the focus is on scale and efficiency. The acquisition of Skyland Grain, LLC, for example, has significantly expanded their grain storage capacity to approximately 275 million bushels. This massive capacity gives them a competitive advantage (a moat) by allowing them to manage and leverage agricultural commodities more effectively, regardless of market volatility. They are also positioned to capitalize on the expected increase in U.S. corn acreage in 2025, which should boost their storage and handling business later in the year.

Their diversified model-spanning grain merchandising, ethanol production, and nutrient distribution-is their ultimate competitive advantage, allowing them to adapt to different market cycles. You can see how this strategy aligns with their long-term principles by reviewing their Mission Statement, Vision, & Core Values of The Andersons, Inc. (ANDE).

Here's a snapshot of the key growth drivers:

The next concrete step for you is to watch for the full-year guidance update at their Investor Day in December 2025, which will provide the most current view on their capital allocation strategy and financial objectives.