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Farmer Brothers Company (FARM)
NASDAQ:FARM
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Farmer Brothers Company
(NASDAQ:FARM)
Rating:41Neutral
Price Target:
$1.50
▼(-25.00% Downside)
Farmer Brothers Company (FARM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$43.11M
Dividend YieldN/A
Average Volume (3M)248.89K
Price to Earnings (P/E)―
Beta (1Y)0.51
Revenue Growth-0.19%
EPS Growth70.65%
CountryUS
Employees1,003
SectorConsumer Defensive
Sector Strength49
IndustryPackaged Foods
Share Statistics
EPS (TTM)-0.23
Shares Outstanding21,555,391
10 Day Avg. Volume114,011
30 Day Avg. Volume248,889
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.47
Enterprise Value/Revenue0.31
Enterprise Value/Gross Profit0.74
Enterprise Value/Ebitda76.80
Forecast
1Y Price Target
$1.50Price Target Upside-25.00% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Farmer Brothers Company Business Overview & Revenue Model
Company DescriptionFarmer Brothers Company (FARM) is a leading national coffee roaster, wholesaler, and distributor of coffee, tea, and culinary products. The company primarily serves the foodservice industry, offering a wide range of products including roasted coffee, liquid coffee, tea, spices, and other culinary essentials. Farmer Brothers operates in various sectors including hospitality, education, healthcare, and convenience stores, providing customized beverage solutions and related equipment to its diverse clientele.
How the Company Makes MoneyFarmer Brothers Company generates revenue through the sale of its coffee, tea, and culinary products to foodservice establishments. The company offers a comprehensive selection of products, including traditional and specialty coffees, iced and hot teas, cappuccino mixes, spices, and sauces, which are sold directly to restaurants, hotels, casinos, hospitals, and other institutional customers. Key revenue streams include the sale of its proprietary brands and private label products, as well as the provision of equipment and service support. Additionally, Farmer Brothers has strategic partnerships with distributors and suppliers to enhance its product offerings and expand its market reach. The company's earnings are influenced by factors such as commodity costs, customer demand, and operational efficiencies.
Farmer Brothers Company Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Sep 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook for Farmer Brothers. While there are significant achievements in operational efficiency and gross margin improvement, challenges persist with declining coffee volumes, net sales, and a reported net loss. The ongoing macroeconomic headwinds and competitive landscape also pose difficulties for growth. Despite these setbacks, the company is optimistic about its strategic initiatives and long-term positioning.Q3-2025 Updates
Positive Updates
Positive Adjusted EBITDA
Farmer Brothers achieved its third consecutive quarter of positive adjusted EBITDA, reaching $1.7 million, an increase of approximately $1.5 million compared to the third quarter of last year.
Improved Gross Margins
Gross margin improved to 42.1%, representing a year-over-year increase of 200 basis points from 40.1% in the third quarter of the previous year.
Operational Efficiency Gains
Significant progress in cost management was noted, with ongoing reductions in selling and G&A expenses contributing to better operational performance.
Launch of Sum>One Coffee Roasters
The official launch of Sum>One Coffee Roasters marked the completion of the brand pyramid and SKU rationalization initiatives, optimizing operations and enhancing customer experience.
Negative Updates
Decline in Coffee Volumes
Total coffee pounds were down 9.4% compared to the third quarter of 2024, driven by downstream degradation across the customer base.
Decrease in Net Sales
Net sales during the third quarter were $82.1 million, down from $85.4 million in the same period last year.
Net Loss for the Quarter
Farmer Brothers recorded a net loss of $5 million, compared to a $700,000 net loss in the third quarter of the previous year, impacted by a $2.4 million net loss from asset disposals.
Challenging Market Conditions
The company faces challenging market conditions due to high coffee prices, low consumer confidence, and potential tariff impacts.
Company Guidance
During the Farmer Brothers Third Quarter Fiscal 2025 Earnings Conference Call, the company reported a positive adjusted EBITDA of $1.7 million for the third consecutive quarter, maintaining gross margins above 42%. Despite a challenging market with declining coffee volumes down 9.4% year-over-year and net sales decreasing to $82.1 million from $85.4 million, the company improved its cost structure by reducing selling and general and administrative expenses. Operating expenses increased to $38.1 million, primarily due to a $5.3 million decrease in net gains from asset disposals. Farmer Brothers recorded a net loss of $5 million, which included a $2.4 million net loss from asset disposals compared to a $2.9 million gain in the prior year. The company maintained a strong cash position with $4.1 million in unrestricted cash and $23.3 million in outstanding credit facility borrowings, while achieving positive cash flow from operating activities of $1.3 million, marking their third consecutive quarter of positive operating cash flow. Looking ahead, the company plans to navigate market challenges by focusing on operational efficiency and expanding customer growth through its newly implemented brand pyramid strategy.Farmer Brothers Company Financial Statement Overview
Summary
Farmer Brothers faces significant financial challenges, with consistent losses impacting profitability and return metrics. Operational efficiency has improved, but cash flow volatility and high leverage pose risks to financial stability.Income Statement
The company has struggled with negative net income and declining EBIT over the periods analyzed, indicating profitability challenges. Gross profit margin has improved in the TTM to 42.0%, showing operational efficiency. However, the negative net profit margin of -4.2% in TTM emphasizes ongoing losses. Revenue growth from the previous year was negligible at 0.1%, suggesting stagnant sales growth.40
Negative
Balance Sheet
The debt-to-equity ratio of 1.07 in TTM shows moderate leverage, which could be a risk if not managed well. Return on Equity remains negative due to losses, indicating unprofitable equity utilization. The equity ratio of 22.8% suggests a relatively low equity base compared to assets, which could impact financial stability.45
Neutral
Cash Flow
The cash flow statement indicates volatility in cash flows, with a negative free cash flow in TTM. However, operating cash flow to net income ratio improved to -0.37 in TTM, suggesting some operational cash generation despite losses. Free cash flow growth remains negative, reflecting cash management challenges.35
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 341.54M | 341.09M | 339.96M | 314.78M | 261.91M | 501.32M |
| Gross Profit | 143.43M | 133.89M | 114.61M | 133.81M | 95.78M | 138.12M |
| EBITDA | 1.39M | 15.56M | -3.94M | 24.76M | 8.81M | 2.31M |
| Net Income | -14.36M | -3.88M | -79.18M | -15.66M | -41.65M | -37.09M |
Balance Sheet | ||||||
| Total Assets | 163.16M | 185.21M | 187.78M | 350.07M | 338.01M | 392.70M |
| Cash, Cash Equivalents and Short-Term Investments | 4.05M | 5.83M | 5.24M | 9.82M | 10.26M | 60.01M |
| Total Debt | 63.15M | 59.41M | 48.68M | 135.41M | 115.84M | 143.48M |
| Total Liabilities | 125.89M | 139.66M | 149.67M | 245.32M | 233.05M | 280.79M |
| Stockholders Equity | 37.26M | 45.55M | 38.11M | 104.75M | 104.96M | 111.91M |
Cash Flow | ||||||
| Free Cash Flow | -5.57M | -27.99M | -21.90M | -26.62M | -16.60M | -16.11M |
| Operating Cash Flow | 5.36M | -14.15M | -6.88M | -11.45M | -1.49M | 1.46M |
| Investing Cash Flow | -6.60M | 14.72M | 88.44M | -6.04M | -10.70M | 21.92M |
| Financing Cash Flow | -225.00K | 10.00K | -86.14M | 17.05M | -37.39M | 29.66M |
Farmer Brothers Company Technical Analysis
Positive
2.00
Price Trends
1.62
Positive
1.63
Positive
1.86
Positive
Market Momentum
0.10
Negative
68.07
Neutral
79.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FARM, the sentiment is Positive. The current price of 2 is above the 20-day moving average (MA) of 1.78, above the 50-day MA of 1.62, and above the 200-day MA of 1.86, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 68.07 is Neutral, neither overbought nor oversold. The STOCH value of 79.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FARM.
Farmer Brothers Company Risk Analysis
Farmer Brothers Company disclosed 38 risk factors in its most recent earnings report. Farmer Brothers Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Farmer Brothers Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $23.86M | 6.47 | 14.11% | ― | 15.86% | 856.59% | |
72 Outperform | $780.60M | 18.16 | 7.04% | ― | 7.30% | -13.73% | |
63 Neutral | $20.54B | 14.42 | -2.84% | 3.14% | 2.08% | -6.12% | |
53 Neutral | $23.45M | ― | -10.25% | ― | -1.16% | -146.23% | |
41 Neutral | $43.11M | ― | -35.72% | ― | -0.19% | 70.65% | |
| ― | $67.99M | ― | -5.85% | ― | ― | ― | |
42 Neutral | $61.75M | ― | -8.34% | ― | 22.79% | 74.00% |
* Consumer Defensive Sector Average
Performance Comparison
FARM
Farmer Brothers Company
2.00
-0.78
-28.06%
BRID
Bridgford Foods
7.49
-5.18
-40.88%
JVA
Coffee Holding Co
4.18
2.09
100.00%
NAII
Natural Alternatives International
3.80
-2.17
-36.35%
SENEA
Seneca Foods
113.20
53.50
89.61%
LSF
Laird Superfood
5.79
2.06
55.23%
Farmer Brothers Company Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Farmer Brothers Announces Key Leadership Appointments
Positive
Jan 13, 2025
Farmer Brothers Co. has announced the appointment of Brian Miller as the new Vice President of Sales and the transition of Thomas E. Bauer to Vice President, Chief Field Operations Officer. Brian Miller, with over 25 years of experience in the consumer product industry and a strong track record in the coffee and beverage sector, is expected to drive top-line growth and enhance customer service at Farmer Brothers. These leadership changes are part of the company’s strategy to maintain sustainable long-term profitability and build on its recent positive momentum.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.