Farmer Brothers Company (FARM) AI Stock Analysis

• Market Cap: $32.37M
• Dividend Yield: N/A
• Average Volume (3M): 74.51K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.68
• Revenue Growth: -1.58%
• EPS Growth: -78.08%
• Country: US
• Employees: 1,003
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): -0.22
• Shares Outstanding: 21,727,158
• 10 Day Avg. Volume: 116,844
• 30 Day Avg. Volume: 74,512
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.09
• P/FCF Ratio: 4.51
• Enterprise Value/Market Cap: 3.18
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 0.75
• Enterprise Value/Ebitda: -93.89
• 1Y Price Target: $1.50
• Price Target Upside: 0.67% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): -0.61
• Revenue Forecast (FY): $340.10M

• Rating: 41 Neutral
• Price Target: $1.50 ▲(0.67% Upside)
• Action: Reiterated Date: 02/16/26
• Date: Action: Reiterated 02/16/26

The score is held down primarily by weak financial performance (sharp TTM revenue decline, continued operating/net losses, and elevated leverage), partially offset by improved operating cash flow and some margin recovery versus 2023. Technicals are modestly bearish with the price below key longer-term moving averages, and valuation remains unattractive due to negative earnings and no dividend support.

Positive Factors

Improved operating cash flow

The shift to positive operating cash flow (~$5.3M TTM) represents a durable improvement in internal liquidity generation versus prior years. Sustained OCF reduces reliance on external financing, helps fund working capital and targeted investments, and provides a foundation for deleveraging and rebuilding profitability over quarters.

Gross margin recovery above 35%

A consistent gross margin above 35% indicates meaningful progress on pricing and cost control that is likely structural if maintained. Higher gross margins improve cash conversion potential and create a larger earnings lever when volumes stabilize, supporting a sustainable path to operating profitability over multiple quarters.

Management pay tied to performance milestones

Revising bonus agreements to link pay and stock units to specific milestones aligns executive incentives with long-term turnaround goals. This governance move can strengthen execution discipline, focus management on durable revenue and margin targets, and improve accountability across strategy implementation.

Negative Factors

Sharp trailing revenue decline

A 32.4% TTM revenue contraction is structurally concerning: sustained top-line weakness erodes operating leverage, reduces scale benefits, and makes fixed-cost absorption harder. Recovering profits requires durable volume or contract wins; absent sustained revenue stabilization, margin gains may be insufficient to restore profitability.

Continued negative profitability

Persistent negative operating and net margins (~-5.5%) mean the core business still destroys economic value. Continued losses limit retained earnings, reduce reinvestment capacity, and pressure ROE (notably negative). Long-term recovery depends on consistent revenue growth plus durable margin expansion to convert gross margin improvements into net profits.

Elevated leverage reduces flexibility

Debt near 2.1x equity constrains strategic flexibility and raises refinancing and interest risks during a turnaround. High leverage reduces capacity for growth investments or weathering further revenue weakness, and increases the importance of sustained cash generation to meet obligations without diluting shareholders or cutting critical programs.

Farmer Brothers Company Business Overview & Revenue Model

Company Description

Farmer 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 Money

Farmer 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 Financial Statement Overview

Summary

Financials remain weak despite some recovery: TTM revenue fell sharply (-32.4%), EBIT/EBITDA and net margin are still negative (~-5.5%), and leverage is elevated (debt ~2.1x equity). Positives include improved gross margin versus 2023 and positive operating cash flow (~$5.3M), but free cash flow is still negative (~-$2.7M) and consistency is not established.

Income Statement

Revenue in TTM (Trailing-Twelve-Months) fell sharply (-32.4%), indicating meaningful top-line pressure. Profitability remains weak: net margin is negative (~-5.5%) and both EBIT and EBITDA are negative in TTM, showing the core business is still not consistently profitable. The positive is that losses are far smaller than the 2023 trough (when margins were deeply negative), and gross margin has improved versus 2023—suggesting better pricing/cost control—but the company still needs sustained revenue stabilization and a return to operating profit.

Balance Sheet

Leverage is elevated in TTM (Trailing-Twelve-Months), with debt running at ~2.1x equity, up versus recent annual periods, which reduces financial flexibility. Equity remains positive, but returns on equity are meaningfully negative (about -33%), reflecting continued net losses and weak value creation. Total assets have trended down versus earlier years, which can be consistent with restructuring but also leaves less balance-sheet cushion if performance deteriorates.

Cash Flow

Cash generation improved in TTM (Trailing-Twelve-Months) with positive operating cash flow (~$5.3M), a step up from several prior years of negative operating cash flow. However, free cash flow is still negative (~-$2.7M) and deteriorated versus the most recent annual period (2025 annual had positive free cash flow), implying higher capital spending or weaker cash conversion. Overall, liquidity looks better than the 2021–2024 period, but free-cash-flow consistency is not yet established.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	337.72M	342.28M	341.09M	339.96M	314.78M	261.91M
Gross Profit	137.46M	148.91M	133.89M	114.61M	133.81M	95.78M
EBITDA	-1.10M	4.53M	15.56M	-3.03M	25.97M	21.24M
Net Income	-18.61M	-14.52M	-3.88M	-79.18M	-15.66M	-41.65M
Balance Sheet
Total Assets	151.45M	161.23M	185.21M	187.78M	350.07M	338.01M
Cash, Cash Equivalents and Short-Term Investments	4.36M	6.80M	5.83M	5.24M	9.82M	10.26M
Total Debt	75.08M	53.36M	59.41M	48.68M	136.01M	115.84M
Total Liabilities	115.79M	117.68M	139.66M	149.67M	245.32M	233.05M
Stockholders Equity	35.66M	43.55M	45.55M	38.11M	104.75M	104.96M
Cash Flow
Free Cash Flow	-2.73M	6.51M	-27.99M	-21.90M	-26.62M	-16.60M
Operating Cash Flow	5.25M	16.10M	-14.15M	-6.88M	-11.45M	-1.49M
Investing Cash Flow	-4.42M	-5.90M	14.72M	88.44M	-6.04M	-10.70M
Financing Cash Flow	-2.20M	-9.23M	10.00K	-86.14M	17.05M	-37.39M

Farmer Brothers Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FARM, the sentiment is Negative. The current price of 1.49 is below the 20-day moving average (MA) of 1.56, below the 50-day MA of 1.55, and below the 200-day MA of 1.62, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 42.68 is Neutral, neither overbought nor oversold. The STOCH value of 52.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FARM.

Farmer Brothers Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SENEA	74 Outperform	$916.92M	10.40	9.41%	―	8.33%	47.71%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
LSF	52 Neutral	$29.11M	-15.14	-14.63%	―	17.73%	-34.71%
JVA	49 Neutral	$17.47M	12.69	5.22%	―	17.92%	64.96%
NAII	46 Neutral	$16.74M	-1.35	-15.93%	―	18.19%	-35.22%
FARM	41 Neutral	$32.37M	-1.73	-48.26%	―	-1.58%	-78.08%

Farmer Brothers Company Corporate Events

Farmer Brothers Amends Executive Bonus Agreements

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.