Some of the best vertical farming stocks have plunged in the past 12 months. However, their performance has decoupled from the fundamental fact that vertical farming is a game changer for the agriculture industry.

To put things in perspective, the agricultural sector is one of the world’s top consumers of water. Given the water crisis globally, a shift to vertical farming is inevitable with farming methods that claim to use up to 98% less water.

A potential global food crisis is also a major concern for policymakers. With vertical farming potentially offering 40 times the yield of an outdoor farm, there might be a solution in hand. This is particularly true since global agricultural land area has been shrinking. At the same time, climate change has translated into decreasing crop frequency and yield.

Given all this, it’s an excellent time to accumulate the best vertical farming stocks. Once cash burn and business scalability challenges are addressed, they are poised for a sharp reversal.

Here are four of the best vertical farming stocks to buy.

AppHarvest (APPH)

Shares of AppHarvest (NASDAQ:APPH) are down 45% on a year-to-date basis. However, they may have put in a bottom. Since hitting a 52-week low of $1.50 on Oct. 21, the stock is up 42%.

AppHarvest recently opened a 15-acre high-tech indoor salads green farm. By the end of 2022, the company expects to have 165 acres of controlled environment agriculture across a four-farm network. This will set the stage for a big bump in revenue.

For the current year, analysts expect the company’s sales to increase 135% to $21.3 million. For 2023, they are forecasting a revenue increase of more than 330% to $91.7 million. With that impressive revenue growth comes economies of scale, which means the company’s losses are likely to narrow over the next few years.

With cash burn and meaningful capital investments, equity dilution may be in the cards. However, the stock is so oversold that dilution or leveraging is unlikely to have a negative impact, especially given its strong revenue growth projections.

Hydrofarm Holdings (HYFM)

Hydrofarm Holdings (NASDAQ:HYFM) is another of the best vertical farming stocks that seems to have bottomed out. Shares are down around 91% this year but up 38% from their 52-week low of $1.87, made on Oct. 3

The company is a manufacturer of branded hydroponics equipment. It’s expected that the global aquaponic and hydroponic market will be worth nearly $2.8 billion by 2027, growing at a compound annual rate of 14.8%. Therefore, there is ample headroom for growth in the coming years.

Analysts expect sales to decline nearly 30% to $337.5 million this year before rising roughly 4% to $350.1 million in 2023. If revenue growth accelerates in 2023, it’s likely that Hydrofarm will deliver positive adjusted EBITDA. This is a potential upside trigger for the stock.

In August, the company entered into an agreement with The Agricultural Gas Company. Per the agreement, Hydrofarm has exclusive distribution rights for AG Gas’ yield-enhancing CO2 enrichment solution. As controlled environment farming, including cannabis, gains traction, the equipment is likely to find a big addressable market.

Village Farms (VFF)

Village Farms (NASDAQ:VFF) is another company that’s focused on controlled environment agriculture. Village Farm is also a good proxy investment in the cannabis sector. With the company looking at high-value plant-based consumer opportunities, the specific focus is on cannabinoids.

Village Farms’ wholly-owned Canadian subsidiary, Pure Sunfarms, is one of the largest cannabis growers in the world. The segment has reported positive adjusted EBITDA for 15 consecutive quarters, the company said on its Q2 earnings call.

In the United States, the company converted half of its 1.3-million-square-foot greenhouse in Texas to cultivate cannabidiol. And it acquired Balanced Health Botanicals, one of the industry’s largest CBD brands, in 2021. Cannabis legalization at the federal level would be a game changer for the stock.

For the second quarter, Village Farms reported consolidated revenue of $82.9 million, up 18% year over year and easily exceeding analysts’ expectations. While the U.S. and Canadian cannabis segment has positive adjusted EBITDA, the fresh produce segment is still producing an EBITDA loss. However, the outlook is positive as the company scales up operations.

VFF stock is down 66% year to date, but shares are up 15% since hitting a 52-week low of $1.88 on Oct. 21.

Agrify (AGFY)

Shares of Agrify (NASDAQ:AGFY), a provider of innovative cultivation and extraction solutions for the cannabis industry, are down 98% in 2022. Ouch. However, they are up 9% since hitting a 52-week low of $1.54 on Oct. 26. Just over a week before hitting that low, the company completed a 1-for-10 reverse stock split.

Agrify recently raised $15.4 million from an at-the-market equity offering. The company still has $34.6 million in remaining availability for future issuance. With this equity program, the company should be fully financed for the next few years.

The company is seeing strong growth. In the first six months of the year, revenue was up more than 140% to $45.4 million from the same period a year ago. For the full year, analysts are predicting 24% revenue growth to $73.6 million.

As demand for vertical farming increases globally, growth is likely to remain attractive, making this one of the best vertical farming stocks to buy.

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On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.