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Farmer Brothers Company (FARM)
NASDAQ:FARM
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Farmer Brothers Company
(NASDAQ:FARM)
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Rating:45Neutral
Price Target:
$1.50
▼(-3.85% Downside)
Farmer Brothers Company is currently facing significant financial and operational challenges, reflected in its low financial performance and valuation scores. The technical analysis indicates a bearish trend, further weighing on the stock's outlook. Strategic improvements in operational efficiency and cash flow management are necessary for future stability.
Positive Factors
Business Model Strength
The direct sales model allows Farmer Brothers to maintain strong customer relationships and control over distribution, enhancing its market position.
Sustainability Commitment
A focus on sustainability can strengthen brand reputation and customer loyalty, providing a competitive edge in the coffee industry.
Leverage Improvement
Reduced leverage improves financial stability and flexibility, allowing for better management of financial obligations and potential growth investments.
Negative Factors
Declining Revenue
A declining revenue trend indicates challenges in market demand or competitive positioning, potentially impacting long-term growth prospects.
Negative Profit Margins
Negative profit margins suggest operational inefficiencies and cost management issues, which can hinder the company's ability to reinvest in growth.
Cash Flow Challenges
Poor cash flow management limits the company's ability to fund operations and strategic initiatives, affecting long-term financial health.
Farmer Brothers Company (FARM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.70M
Dividend YieldN/A
Average Volume (3M)66.74K
Price to Earnings (P/E)―
Beta (1Y)0.67
Revenue Growth-1.58%
EPS Growth-78.08%
CountryUS
Employees1,003
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)-0.19
Shares Outstanding21,602,013
10 Day Avg. Volume48,520
30 Day Avg. Volume66,740
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.67
Price to Sales (P/S)0.09
P/FCF Ratio4.51
Enterprise Value/Market Cap2.61
Enterprise Value/Revenue0.26
Enterprise Value/Gross Profit0.61
Enterprise Value/Ebitda19.00
Forecast
1Y Price Target
$2.25Price Target Upside44.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)-0.59
Revenue Forecast (FY)$350.20M
Farmer Brothers Company Business Overview & Revenue Model
Company DescriptionFarmer Bros. Co. engages in the roasting, wholesale, equipment servicing, and distribution of coffee, tea, and culinary products in the United States. The company offers roast and ground coffee; frozen liquid coffee; flavoured and unflavoured iced and hot teas; culinary products, including spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, and syrups and sauces, as well as coffee filters, cups, sugar, and creamers; and other beverages comprising cappuccino, cocoa, granitas, and other blender-based beverages and concentrated and ready-to-drink cold brew and iced coffee. It serves small independent restaurants, foodservice operators, and large institutional buyers, as well as consumers. The company distributes its products through direct-store-delivery network, and common carriers or third-party distributors, as well as Website. The company was founded in 1912 and is headquartered in Northlake, Texas.
How the Company Makes MoneyFarmer Brothers Company generates revenue primarily through the sale of coffee and related products. The company operates a direct sales model, supplying products to foodservice businesses across the United States. Key revenue streams include wholesale coffee distribution, where they offer a wide range of coffee blends and brewing equipment, as well as tea and culinary products. The company also benefits from its strategic partnerships with various coffee growers and suppliers, ensuring a steady supply of high-quality beans. Additionally, Farmer Brothers has invested in technology and logistics to enhance its distribution efficiency, which contributes to cost savings and improved margins. The company’s focus on sustainability and quality also helps in building customer loyalty and repeat business, further driving its revenue growth.
Farmer Brothers Company Earnings Call Summary
Earnings Call Date:Sep 11, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Neutral
Farmer Brothers demonstrated significant operational and financial improvements with increased efficiency and successful brand initiatives. However, the company faces considerable challenges due to decreased coffee volumes, rising costs, and market headwinds that may impact future financial results.Q4-2025 Updates
Positive Updates
Gross Margin Improvement
Gross margins ended the year above 43%, representing a more than $14 million year-over-year improvement in adjusted EBITDA and a 420 basis point increase compared to the prior year.
Debt Reduction and Cash Flow
The company significantly paid down debt, ending the year with $6.8 million in unrestricted cash and cash equivalents and a $10 million decrease in net debt. Free cash flow generation improved significantly, with a $34.5 million year-over-year increase for the full fiscal year.
Operational Efficiency Gains
Farmer Brothers captured internal efficiency gains from manufacturing, sales, and network optimization initiatives. Decreases in SG&A expenses were achieved, and a new CRM tool was launched to enhance customer analytics.
Successful Launch of Sum>One Brand
The launch of the Sum>One specialty brand was completed, with early promising opportunities and collaborations with larger customers to launch branded cafe experiences.
Leadership and Structural Improvements
Appointments of Brian Miller in sales and Travis Young in field operations helped separate responsibilities, align KPIs, and improve execution.
Negative Updates
Decrease in Coffee Volume
Total coffee volumes decreased by 10% year-over-year, influenced by a weak food service sector and a significant rise in green coffee prices.
Impact of Tariffs
A 50% tariff on goods imported from Brazil may significantly increase the overall cost of goods in fiscal 2026, adding pressure to gross margins and financial results.
Net Loss and Asset Sales
The company recorded a net loss of $14.5 million for the full fiscal year, compared to a loss of $3.9 million in the prior year, due to fewer branch sales and pension settlement losses.
Market Headwinds
The macroeconomic environment for the coffee industry remains challenging, with elevated green coffee prices and significant pressure on gross margins expected in fiscal 2026.
Company Guidance
In the Farmer Brothers Fiscal Fourth Quarter and Year-End 2025 earnings call, the company reported significant financial improvements, including a year-over-year increase in adjusted EBITDA of over $14 million and gross margins exceeding 43%. A strategic focus on operational efficiency led to a reduction in SG&A expenses and significant debt repayment. Despite facing a challenging macroeconomic environment, including a 65% rise in green coffee prices and a 50% tariff on Brazilian imports, the company successfully launched its Sum>One specialty brand and completed its SKU rationalization initiative. Farmer Brothers also improved its technology platforms, enhancing supply chain optimization and customer analytics. With new leadership appointments and a focus on driving top-line revenue, the company aims to leverage its distribution network and improve customer retention while navigating anticipated financial pressures in fiscal 2026.Farmer Brothers Company Financial Statement Overview
Summary
Farmer Brothers Company is facing a challenging financial landscape with declining revenues and profitability issues. Despite some improvement in leverage, significant cash flow challenges persist. Strategic initiatives to enhance operational efficiency and cash flow management are crucial for future stability and growth.Income Statement
Farmer Brothers Company shows a declining revenue trend with a negative revenue growth rate of -1.2% TTM. The gross profit margin is relatively healthy at 42.5% TTM, but the company struggles with profitability, as indicated by a negative net profit margin of -4.0% TTM and negative EBIT and EBITDA margins. The company needs to address its operational inefficiencies to improve its bottom line.45
Neutral
Balance Sheet
The company's debt-to-equity ratio has improved to 0.91 TTM from previous periods, indicating a reduction in leverage. However, the return on equity remains negative at -33.4% TTM, reflecting ongoing challenges in generating returns for shareholders. The equity ratio is not provided, but the overall balance sheet shows a need for improved financial stability.50
Neutral
Cash Flow
Farmer Brothers Company faces significant challenges in cash flow management, with a drastic decline in free cash flow growth of -93.8% TTM. The operating cash flow to net income ratio is low at 0.12 TTM, indicating limited cash generation from operations. The company must focus on enhancing its cash flow efficiency to support its financial health.40
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 338.82M | 342.28M | 341.09M | 339.96M | 314.78M | 261.91M |
| Gross Profit | 144.03M | 148.91M | 133.89M | 114.61M | 133.81M | 95.78M |
| EBITDA | 4.62M | 4.53M | 15.56M | -3.03M | 25.97M | 21.24M |
| Net Income | -13.54M | -14.52M | -3.88M | -79.18M | -15.66M | -41.65M |
Balance Sheet | ||||||
| Total Assets | 158.78M | 161.23M | 185.21M | 187.78M | 350.07M | 338.01M |
| Cash, Cash Equivalents and Short-Term Investments | 3.82M | 6.80M | 5.83M | 5.24M | 9.82M | 10.26M |
| Total Debt | 54.85M | 53.36M | 59.41M | 48.68M | 136.01M | 115.84M |
| Total Liabilities | 118.78M | 117.68M | 139.66M | 149.67M | 245.32M | 233.05M |
| Stockholders Equity | 40.01M | 43.55M | 45.55M | 38.11M | 104.75M | 104.96M |
Cash Flow | ||||||
| Free Cash Flow | 404.00K | 6.51M | -27.99M | -21.90M | -26.62M | -16.60M |
| Operating Cash Flow | 8.60M | 16.10M | -14.15M | -6.88M | -11.45M | -1.49M |
| Investing Cash Flow | -4.52M | -5.90M | 14.72M | 88.44M | -6.04M | -10.70M |
| Financing Cash Flow | -5.22M | -9.23M | 10.00K | -86.14M | 17.05M | -37.39M |
Farmer Brothers Company Technical Analysis
Positive
1.56
Price Trends
1.52
Positive
1.68
Negative
1.65
Negative
Market Momentum
<0.01
Negative
54.01
Neutral
72.59
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 1.56 is above the 20-day moving average (MA) of 1.51, above the 50-day MA of 1.52, and below the 200-day MA of 1.65, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 54.01 is Neutral, neither overbought nor oversold. The STOCH value of 72.59 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $803.47M | 13.60 | 9.41% | ― | 8.33% | 47.71% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
53 Neutral | $22.29M | 12.02 | 7.17% | ― | 17.92% | 64.96% | |
50 Neutral | $35.69M | -18.59 | -14.63% | ― | 17.73% | -34.71% | |
48 Neutral | $29.00M | -2.40 | -15.93% | ― | 18.19% | -35.22% | |
45 Neutral | $33.70M | -2.48 | -33.46% | ― | -1.58% | -78.08% |
* Consumer Defensive Sector Average
FARM
Farmer Brothers Company
1.56
-0.14
-8.24%
BRID
Bridgford Foods
8.28
-2.07
-20.00%
JVA
Coffee Holding Co
3.91
0.10
2.76%
NAII
Natural Alternatives International
4.70
0.50
11.79%
SENEA
Seneca Foods
117.22
43.89
59.85%
LSF
Laird Superfood
3.34
-3.72
-52.69%
Farmer Brothers Company Corporate Events
Executive/Board Changes
Farmer Brothers Amends Executive Bonus Agreements
Neutral
Dec 11, 2025
On December 8, 2025, Farmer Bros. Co. amended its Bonus Opportunities Letter Agreements with key executives, including the CEO, CFO, and Vice President, to adjust the timing of bonuses and performance-based stock units. This change allows the executives to receive their full bonuses upon meeting specific milestones, potentially impacting the company’s executive compensation strategy and aligning leadership incentives with performance goals.
The most recent analyst rating on (FARM) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Farmer Brothers Company stock, see the FARM Stock Forecast page.
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.