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Farmer Brothers Company (FARM)
NASDAQ:FARM
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Farmer Brothers Company
(NASDAQ:FARM)
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Rating:49Neutral
Price Target:
$2.00
▲(5.26% Upside)
Farmer Brothers Company has shown some operational improvements and positive technical indicators, but ongoing profitability challenges and valuation concerns weigh heavily on the overall score. The earnings call provided some optimism with strategic initiatives, but market headwinds and cost pressures remain significant risks.
Farmer Brothers Company (FARM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$41.03M
Dividend YieldN/A
Average Volume (3M)190.14K
Price to Earnings (P/E)―
Beta (1Y)0.54
Revenue Growth0.35%
EPS Growth-272.31%
CountryUS
Employees1,003
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)-0.22
Shares Outstanding21,592,497
10 Day Avg. Volume394,862
30 Day Avg. Volume190,140
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 Cap1.85
Enterprise Value/Revenue0.22
Enterprise Value/Gross Profit0.51
Enterprise Value/Ebitda16.76
Forecast
1Y Price Target
$2.67Price Target Upside40.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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:Nov 06, 2025
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 shows mixed financial performance. While revenue growth and gross profit margins have improved, persistent negative net profit margins and challenges in cash flow generation indicate ongoing operational difficulties. The balance sheet shows some improvement in leverage, but negative return on equity remains a concern.Income Statement
Farmer Brothers Company shows a mixed performance in its income statement. The gross profit margin has improved over the years, reaching 43.51% in 2025, indicating efficient cost management. However, the company has consistently reported negative net profit margins, with a significant decline in 2025 to -4.24%. Revenue growth is positive, with a notable increase of 21.8% in 2025, but the persistent negative EBIT and EBITDA margins highlight ongoing operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals a moderate financial position. The debt-to-equity ratio has improved to 0.89 in 2025, suggesting better leverage management compared to previous years. However, the return on equity remains negative, indicating that the company is not generating sufficient returns on shareholders' equity. The equity ratio has not been provided, but the overall leverage position shows some improvement.50
Neutral
Cash Flow
Cash flow analysis indicates challenges in generating positive cash flows. The operating cash flow has turned positive in 2025, but the free cash flow growth rate is negative, reflecting difficulties in maintaining cash reserves. The operating cash flow to net income ratio is low, and the free cash flow to net income ratio is below 1, suggesting inefficiencies in converting net income into cash.40
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 342.28M | 342.28M | 341.09M | 339.96M | 314.78M | 261.91M |
| Gross Profit | 148.91M | 148.91M | 133.89M | 114.61M | 133.81M | 95.78M |
| EBITDA | 4.53M | 4.53M | 15.56M | -3.94M | 24.76M | 8.81M |
| Net Income | -14.52M | -14.52M | -3.88M | -79.18M | -15.66M | -41.65M |
Balance Sheet | ||||||
| Total Assets | 161.23M | 161.23M | 185.21M | 187.78M | 350.07M | 338.01M |
| Cash, Cash Equivalents and Short-Term Investments | 6.80M | 6.80M | 5.83M | 5.24M | 9.82M | 10.26M |
| Total Debt | 53.27M | 53.27M | 59.41M | 48.68M | 135.41M | 115.84M |
| Total Liabilities | 117.68M | 117.68M | 139.66M | 149.67M | 245.32M | 233.05M |
| Stockholders Equity | 43.55M | 43.55M | 45.55M | 38.11M | 104.75M | 104.96M |
Cash Flow | ||||||
| Free Cash Flow | 6.51M | 6.51M | -27.99M | -21.90M | -26.62M | -16.60M |
| Operating Cash Flow | 16.10M | 16.10M | -14.15M | -6.88M | -11.45M | -1.49M |
| Investing Cash Flow | -5.90M | -5.90M | 14.72M | 88.44M | -6.04M | -10.70M |
| Financing Cash Flow | -9.23M | -9.23M | 10.00K | -86.14M | 17.05M | -37.39M |
Farmer Brothers Company Technical Analysis
Positive
1.90
Price Trends
1.77
Positive
1.66
Positive
1.85
Positive
Market Momentum
0.03
Positive
51.21
Neutral
21.65
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 1.9 is below the 20-day moving average (MA) of 1.95, above the 50-day MA of 1.77, and above the 200-day MA of 1.85, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 51.21 is Neutral, neither overbought nor oversold. The STOCH value of 21.65 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | 711.13M | 16.53 | 6.74% | ― | 7.30% | -13.73% | |
59 Neutral | 30.37M | 16.38 | 6.93% | ― | 17.92% | 64.96% | |
53 Neutral | 19.28M | -2.25 | 0.00% | ― | -1.16% | -146.23% | |
49 Neutral | $41.03M | ― | -32.58% | ― | 0.35% | -272.31% | |
42 Neutral | 65.05M | -58.43 | -13.79% | ― | 22.79% | 74.00% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
Performance Comparison
FARM
Farmer Brothers Company
1.90
-0.18
-8.65%
BRID
Bridgford Foods
8.05
-1.28
-13.72%
JVA
Coffee Holding Co
5.32
1.94
57.40%
NAII
Natural Alternatives International
3.12
-3.37
-51.93%
SENEA
Seneca Foods
103.05
41.45
67.29%
LSF
Laird Superfood
6.10
1.95
46.99%
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.