Lindsay Corp (LNN): A Global Precision Irrigation Leader Poised for Growth

Lindsay Corporation (LNN) is emerging as a critical player in the $100 billion global precision agriculture market, leveraging its leadership in irrigation technology to capitalize on secular trends in water conservation and food security. With a 22% year-over-year revenue surge in Q3 2025, strategic international diversification, and margin resilience amid macroeconomic headwinds, LNN presents a compelling opportunity for investors seeking exposure to a high-growth, underappreciated sector. Here's why this stock deserves a closer look.

The Global Growth Engine: Revenue and Market Diversification

Lindsay's Q3 2025 results highlight its transformation into a global irrigation powerhouse. Revenue reached $169.5 million, up 22% from the prior-year period, driven by a 25% jump in its core irrigation segment, which now accounts for 85% of total revenue. The key driver? International expansion, particularly in the Middle East and North Africa (MENA) region, where large-scale projects contributed $24 million in Q3—exceeding initial expectations—and a new $20 million project secured in Q4 2025.

Brazil's credit-driven irrigation boom is another growth lever. Despite near-term delays caused by 15% benchmark interest rates, Lindsay is positioned to benefit as farmers invest in irrigation systems to capitalize on rising crop prices. The company's backlog of $117.1 million (though down from prior-year levels) reflects strong demand for its high-margin international projects.

Margin Resilience: Tech Partnerships and Recurring Revenue

While LNN's infrastructure segment saw margin compression due to lower-margin Road Zipper System™ sales, its precision irrigation business is thriving. A key differentiator is its partnership with Pessl Instruments, an Austrian sensor manufacturer. The integration of Pessl's infield sensors with Lindsay's FieldNET Advisor platform creates a closed-loop precision irrigation system, enabling real-time agronomic decision-making. This technology not only deepens customer engagement but also generates recurring revenue through subscriptions, a critical driver of margin expansion.

The results speak for themselves:
- 26% EPS beat: LNN's $1.78 EPS exceeded estimates by 30%, excluding a $0.44 per-share tax credit in the prior year.
- Strong cash flow: Operating cash flow rose to $68.9 million year-to-date, up 61% from 2024, fueling liquidity.

Liquidity: A Fortress Balance Sheet

Lindsay's $261 million in total available liquidity (including $196 million in cash and a $50 million credit facility) provides ample flexibility to weather near-term headwinds, such as tariff-related costs or delayed project timelines. Management's capital discipline—prioritizing R&D, strategic partnerships, and shareholder returns—ensures this cash isn't just a buffer but an engine for growth.

Geopolitical Risks? Overblown

Concerns about Middle Eastern geopolitical instability are overhyped. Lindsay's projects are tied to long-term government infrastructure goals (e.g., Saudi Vision 2030), and execution risks are mitigated by prepaid contracts. Meanwhile, Brazil's irrigated acreage is set to expand by 15% annually through 2030, driven by crop price stability and energy infrastructure upgrades.

Valuation: A Premium Worth Paying

At a forward P/E of 25x, LNN trades at a premium to industrial peers. However, this is justified by its high-margin, recurring-revenue model and exposure to two secular tailwinds:
1. Water scarcity: By 2050, 52% of global cropland will face high water stress, per the World Bank. Lindsay's precision systems reduce water use by 30%.
2. Agricultural tech adoption: Only 15% of global farmland uses precision irrigation; Lindsay's partnerships like Pessl are accelerating this shift.

Investment Thesis

LNN is a thematic growth play for investors betting on climate resilience and agricultural productivity. With a robust order backlog, margin-enhancing tech partnerships, and minimal geopolitical exposure, it's positioned to deliver 15-20% annual revenue growth over the next five years.

Buy Recommendation:
- Price Target: $165–$180 (based on 27x 2026 EPS estimates).
- Risk Factors: Delays in MENA project timelines, prolonged U.S. farm income weakness, or supply chain disruptions.

In a market obsessed with short-term macro noise, Lindsay Corp is quietly building a decade-long growth story. For investors with a 3–5-year horizon, this precision irrigation leader offers a rare blend of execution, innovation, and resilience—a true global growth engine.

Action Item: Consider adding LNN to your portfolio as a thematic bet on water conservation and agricultural tech, especially if you can tolerate some near-term volatility tied to macroeconomic factors.