7 Worst Vertical Farming and Hydroponic Stocks to Buy

3. Edible Garden AG Incorporated (NASDAQ:EDBL)

 Short % of Float: 4.10%

Number of Hedge Fund Holders: 4

Edible Garden AG Incorporated (NASDAQ:EDBL) produces organic herbs and salad kits, distributed through major retailers. It operates in the controlled environment agriculture (CEA) sector. The company has encountered financial challenges, as its share price has dropped by over 72% year-to-date despite its sustainability-driven approach.

Edible Garden AG Incorporated (NASDAQ:EDBL) reported a revenue of $2.6 million for the third quarter that ended September 30, 2024, a drop from $3 million in the prior-year period. The company’s decision to phase out lower-margin products was the primary driver of the revenue drop. However, the drop highlights deeper issues as well, such as supply chain inefficiencies and weak demand. Furthermore, the $215,000 revenue delay was caused by Hurricane Helene, which further exposed the company’s vulnerability to external disruptions.

Despite the revenue decline, its gross profit margin increased to 27.1%, primarily due to cost-cutting measures. However, the bottom line remains a concern as it incurred a net loss of $2.1 million. Moreover, the company also encountered significant cash flow risk. Although it secured $5.65 million through an offering, a considerable chunk was immediately used to pay down $3.2 million in debt, which improved its leverage.

On the other hand, Edible Garden AG Incorporated’s (NASDAQ:EDBL) shift toward nutraceuticals and sports nutrition products raises doubts about where it can seamlessly scale in a highly competitive industry. Consequently, Edible Garden AG Incorporated (NASDAQ:EDBL) remains one of the worst agriculture stocks in the market, with an uncertain strategic direction, dropping sales, and financial instability. Although its sustainability initiative may attract niche investors, investor sentiments remain driven by decreasing revenue, liquidity concerns, and persistent operational challenges.