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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
▼(-9.09%Downside)
Farmer Brothers Company (FARM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.39M
Dividend YieldN/A
Average Volume (3M)128.39K
Price to Earnings (P/E)―
Beta (1Y)0.49
Revenue Growth-0.19%
EPS Growth70.65%
CountryUS
Employees1,003
SectorConsumer Defensive
Sector Strength60
IndustryPackaged Foods
Share Statistics
EPS (TTM)-0.23
Shares Outstanding21,555,391
10 Day Avg. Volume246,021
30 Day Avg. Volume128,392
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)0.84
Price to Sales (P/S)0.00
P/FCF Ratio-5.65
Enterprise Value/Market Cap2.19
Enterprise Value/Revenue0.05
Enterprise Value/Gross Profit0.47
Enterprise Value/Ebitda20.10
Forecast
1Y Price Target
$3.50Price Target Upside112.12% Upside
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: -13.16%|
Next Earnings Date:Sep 16, 2025
Earnings Call Sentiment Neutral
Farmer Brothers demonstrated resilience by reporting positive adjusted EBITDA and improved gross margins despite a challenging market environment. However, declines in coffee volumes, customer count, and net sales, along with a recorded net loss, highlight ongoing challenges. The company remains focused on growth and cost management efforts.Q3-2025 Updates
Positive Updates
Positive Adjusted EBITDA
Farmer Brothers reported its third consecutive quarter of positive adjusted EBITDA at $1.7 million, marking an increase of approximately $1.5 million compared to the third quarter of last year.
Improved Gross Margins
Gross margins in the third quarter were 42.1%, a year-over-year increase of 200 basis points from 40.1% in the third quarter of last year.
Successful Cost Management
The company achieved continued improvement in its cost structure, with selling and G&A expenses decreasing and rightsizing initiatives leading to $1.9 million lower operating expenses when adjusted for net asset sales.
Launch of Sum>One Coffee Roasters
The official launch of Sum>One Coffee Roasters marked the completion of the company's brand pyramid and coffee SKU rationalization initiatives.
Positive Operating Cash Flow
The company reported positive cash flow from operating activities at $1.3 million, an increase of $3.6 million compared to the same period last year.
Negative Updates
Decline in Coffee Volumes and Customer Count
The company saw a decline in overall coffee volumes and customer count during the quarter, with total coffee pounds down 9.4% compared to the third quarter of 2024.
Net Sales Decrease
Net sales during the third quarter of fiscal 2025 were down year-over-year to $82.1 million, compared to $85.4 million during the prior year period.
Net Loss Recorded
Farmer Brothers recorded a net loss of $5 million for the quarter, compared to a $700,000 net loss in the third quarter of last year, impacted by a $2.4 million net loss associated with the disposal of assets.
Challenging Market Conditions
The company continues to face challenging market conditions, including high coffee market prices, decreased consumer confidence, and potential tariff impacts.
Company Guidance
During the Farmer Brothers Third Quarter Fiscal 2025 Earnings Conference Call, several key metrics and strategic initiatives were discussed. The company reported a positive adjusted EBITDA of $1.7 million, marking its third consecutive quarter of profitability, despite a challenging economic environment. Gross margins were maintained above 42%, specifically at 42.1%, representing a year-over-year increase of 200 basis points. However, net sales for the quarter decreased to $82.1 million from $85.4 million in the prior year, with total coffee volumes down by 9.4% compared to the third quarter of 2024. The company also reported a net loss of $5 million, affected by a $2.4 million net loss associated with asset disposals. Operating expenses increased to $38.1 million, primarily due to a decrease in net gains related to asset disposals. Despite these challenges, Farmer Brothers has focused on streamlining operations, reducing overhead, and optimizing its brand pyramid, which contributed to improved cost structure and operational efficiencies. The company has also adjusted its leadership, with Travis Young now leading the DSD team, as they aim to drive top-line revenue and customer growth. Looking forward, Farmer Brothers plans to continue managing inventory and pricing to maintain gross margins above the 40% target, while also focusing on expanding their customer base and product offerings.Farmer Brothers Company Financial Statement Overview
Summary
Farmer Brothers faces significant financial challenges with ongoing losses impacting profitability and return metrics. Despite some operational efficiency improvements, the company struggles with cash flow volatility and high leverage, posing 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 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 341.09M | 339.96M | 469.19M | 397.85M | 501.32M |
| Gross Profit | 133.89M | 114.61M | 136.92M | 100.92M | 138.12M |
| EBITDA | 15.56M | -3.94M | 18.52M | 16.27M | 2.31M |
| Net Income | -3.88M | -79.18M | -15.66M | -41.65M | -37.09M |
Balance Sheet | |||||
| Total Assets | 185.21M | 187.78M | 350.07M | 338.01M | 392.70M |
| Cash, Cash Equivalents and Short-Term Investments | 5.83M | 5.24M | 9.82M | 10.26M | 60.01M |
| Total Debt | 59.41M | 48.68M | 135.41M | 115.09M | 143.48M |
| Total Liabilities | 139.66M | 149.67M | 245.32M | 233.05M | 280.79M |
| Stockholders Equity | 45.55M | 38.11M | 104.75M | 104.96M | 111.91M |
Cash Flow | |||||
| Free Cash Flow | -27.99M | -21.90M | -26.62M | -16.60M | -16.11M |
| Operating Cash Flow | -14.15M | -6.88M | -11.45M | -1.49M | 1.46M |
| Investing Cash Flow | 14.72M | 88.44M | -6.04M | -10.70M | 21.92M |
| Financing Cash Flow | 10.00K | -86.14M | 17.05M | -37.39M | 29.66M |
Farmer Brothers Company Technical Analysis
Positive
1.65
Price Trends
1.49
Positive
1.80
Negative
1.88
Negative
Market Momentum
>-0.01
Negative
65.01
Neutral
28.22
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 1.65 is above the 20-day moving average (MA) of 1.44, above the 50-day MA of 1.49, and below the 200-day MA of 1.88, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 65.01 is Neutral, neither overbought nor oversold. The STOCH value of 28.22 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 (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $706.00M | 17.56 | 6.77% | ― | 8.25% | -30.16% | |
75 Outperform | $27.00M | 7.07 | 14.11% | ― | 15.24% | ― | |
65 Neutral | $27.03B | 15.38 | -4.26% | 3.26% | 1.00% | 3.39% | |
49 Neutral | $76.00M | ― | -7.38% | ― | 25.04% | 87.51% | |
48 Neutral | $21.56M | ― | -10.25% | ― | -1.16% | -146.23% | |
41 Neutral | $30.39M | ― | -35.72% | ― | -0.19% | 70.65% |
* Consumer Defensive Sector Average
Performance Comparison
FARM
Farmer Brothers Company
1.65
-1.24
-42.91%
JVA
Coffee Holding Co
4.54
1.75
62.72%
NAII
Natural Alternatives International
3.36
-2.43
-41.97%
SENEA
Seneca Foods
103.98
42.66
69.57%
LSF
Laird Superfood
7.19
3.09
75.37%
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.