FMC Stock Is Crashing — Here’s Why

FMC (NYSE: FMC) stock is falling from the sky. After earnings were announced last week, shares plummeted by more than 40%. But that’s just the tip of the iceberg. Since 2023, shares have lost nearly 90% of their value.

What exactly is going on, and is this your chance to buy low?

There isn’t just one culprit to FMC’s latest demise. The nearly 90% reduction in value since 2023 has stemmed from multiple sources. But there are a few primary concerns that investors should be familiar with.

FMC is considered an agricultural sciences company, which basically means that it supplies farmers with things like insecticides, herbicides, fungicides, and other crop protection solutions. The company generates revenue from all over the world, with an active research and development arm focused on creating new solutions and technologies to help farmers improve yields and reduce crop loss. In other words, FMC’s goal is to help farmers make more money.

The most obvious reason FMC stock is tanking is poor financials. Annual sales have moved from nearly $6 billion in 2023 to just above $4 billion today. And while its gross profit margin hasn’t declined nearly as much, deteriorating revenue has caused its net profit margin to hover close to 0%. This past quarter, the company posted a $569 million loss compared to a $66 million profit this time last year. Next quarter, the company expects revenue to fall by another 4% year over year, resulting in negative free cash flow of $100 million for 2025. Accordingly, the market has dramatically reduced the company’s price-to-sales ratio from roughly 3 in 2023 to less than 0.5 today.

Poor financials, of course, are just a reflection of a struggling business model. What exactly is going wrong operationally for FMC? A few obvious culprits are to blame. FMC doesn’t typically sell its products directly to farmers. Instead, it sells to distributors and other vendors, which in turn sell to farmers. Due to supply chain disruptions, these vendors built up too much inventory, forcing them to reduce orders. Encouragingly, however, FMC believes that real-world applications of their products by farmers has held steady, suggesting that this is simply a short-term headwind that needs unwinding.

But there are other issues, too. This oversupply has caused the company to lower prices in order to stoke revenue growth. Again, this may be a short-term issue that will be resolved once oversupply is removed as an overhang. But competition in the space is rising, too, especially internationally, where FMC has dealt with foreign exchange headwinds that have lowered earnings when reported in U.S. dollars. Competition is especially fierce in regions where demand headwinds exist, such as drought-ridden Brazil and financially pressured farmers in Europe.