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HF Foods Group Inc (HFFG)
NASDAQ:HFFG

HF Foods Group (HFFG) AI Stock Analysis

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HF Foods Group

(NASDAQ:HFFG)

Rating:51Neutral
Price Target:
$3.50
▼(-2.23%Downside)
The overall stock score is influenced primarily by financial performance challenges, including negative profitability metrics and a poor valuation. Technical analysis reflects bearish momentum, but positive insights from the earnings call highlight strategic resilience and future growth potential.

HF Foods Group (HFFG) vs. SPDR S&P 500 ETF (SPY)

HF Foods Group Business Overview & Revenue Model

Company DescriptionHF Foods Group Inc., through its subsidiaries, operates as a food service distributor to Asian restaurants located in the Southeastern, Pacific, and Mountain West regions of the United States. It distributes Asian specialty food items, meat and poultry products, seafood, fresh produce, packaging and other items, and commodities. The company also provides design and printing services, as well as logistic and food processing services. In addition, it is involved in real estate holding activities. The company is headquartered in City of Industry, California.
How the Company Makes MoneyHF Foods Group generates revenue through the sale of a wide array of food and restaurant supply products to Asian-themed restaurants across the United States. The company's primary revenue stream comes from distributing perishable and non-perishable food items, leveraging its extensive distribution network to reach a broad customer base. Additionally, HF Foods benefits from economies of scale by operating large distribution centers, allowing it to maintain competitive pricing. The company also engages in strategic partnerships and acquisitions to expand its market presence and enhance its product offerings, further contributing to its financial performance.

HF Foods Group Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: -13.11%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call presented a mix of positive operational achievements and strategic advancements alongside challenges related to macroeconomic factors and an increased net loss. Despite these challenges, the company's strategic initiatives and growth in key financial metrics indicate a strong focus on long-term growth and operational efficiency.
Q1-2025 Updates
Positive Updates
Net Revenue Growth
Net revenue increased 0.9% year-over-year to $298.4 million despite one fewer day of operations in the first quarter of 2025.
Adjusted EBITDA Growth
Adjusted EBITDA increased 12.3% year-over-year to $9.8 million, demonstrating significant growth under challenging conditions.
Digital Transformation and ERP Implementation
Successfully completed the implementation of a new ERP application across the entire network, enhancing efficiency and enabling data-driven decision-making.
E-commerce Platform Launch
Launched a new e-commerce platform in Utah, North Carolina, and Florida, allowing direct purchases by restaurant employees and owners.
Cost Optimization Efforts
Distribution, selling, and administrative expenses decreased by $0.7 million, with a strategic plan to reduce expenses by 3% to 5% by the end of 2025.
Operating Income Improvement
Operating income for the first quarter of 2025 was $1.2 million compared to an operating loss of $0.1 million in the prior year quarter.
Facility Enhancement Initiatives
Progress on strategic facility enhancements, including the on-track renovation of the Charlotte distribution center by the end of Q2 2025.
Negative Updates
Net Loss Increase
Net loss increased to $1.5 million compared to $0.6 million in the prior year quarter, primarily due to a $3.2 million unfavorable change in the fair market value of interest rate swaps.
Macroeconomic Challenges
Faced macro headwinds, including new tariffs, inflationary pressures, and shifts in consumer spending behaviors.
Company Guidance
During the HF Foods Group's first quarter 2025 earnings call, significant guidance was provided, highlighting a 0.9% year-over-year increase in net revenue to $298.4 million, despite a shorter operational period. Adjusted EBITDA rose by 12.3% to $9.8 million, demonstrating resilience amidst macroeconomic challenges, including new tariffs and inflationary pressures. Gross profit increased by 1.1% to $51.0 million, with a consistent gross profit margin of 17.1%. Cost optimization efforts led to a decrease in distribution, selling, and administrative expenses by $0.7 million, contributing to an operating income of $1.2 million from a previous loss. However, the net loss widened to $1.5 million due to a $3.2 million unfavorable change in interest rate swaps. Strategic initiatives, including a new ERP system and e-commerce platform rollout, aim to enhance operational efficiency and customer service, positioning HF Foods for sustained growth and successful navigation of the evolving market landscape.

HF Foods Group Financial Statement Overview

Summary
HF Foods Group exhibits solid revenue growth but faces challenges with declining profitability and operational inefficiencies. The balance sheet reflects moderate leverage, and while cash flow management shows some strength, volatility and reliance on external financing may pose risks.
Income Statement
45
Neutral
HF Foods Group's revenue growth has been strong over the years; however, recent trends show declining profitability with a negative net profit margin of -4.0% in 2024. The company's gross profit margin remains stable at approximately 17.1%, but the negative EBIT and EBITDA margins in the latest year highlight operational challenges.
Balance Sheet
50
Neutral
The company maintains a moderate debt-to-equity ratio with a decrease in total debt over the years. However, the equity ratio has slightly weakened, indicating potential risk if liabilities continue to rise. Return on equity turned negative, reflecting the net losses impacting shareholder returns.
Cash Flow
55
Neutral
Operating cash flow has improved, but free cash flow has shown volatility, decreasing recently. The free cash flow to net income ratio is positive, suggesting effective cash conversion despite net losses. However, the fluctuating cash flows present potential challenges in sustaining operations without external financing.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.20B1.15B1.17B796.88M566.83M
Gross Profit
205.19M204.03M205.51M151.51M100.29M
EBIT
-39.13M8.97M-18.29M29.48M-4.48M
EBITDA
-8.04M34.77M36.84M52.83M-322.75M
Net Income Common Stockholders
-48.51M-2.17M235.00K22.14M-342.68M
Balance SheetCash, Cash Equivalents and Short-Term Investments
14.47M15.23M24.29M14.79M9.58M
Total Assets
549.99M596.52M637.53M596.95M484.29M
Total Debt
209.93M203.32M230.15M190.68M135.75M
Net Debt
195.47M188.09M205.86M175.89M126.17M
Total Liabilities
308.70M308.54M341.28M301.96M219.48M
Stockholders Equity
239.29M286.66M291.81M290.95M260.43M
Cash FlowFree Cash Flow
10.09M12.29M25.00M15.30M43.47M
Operating Cash Flow
22.64M15.80M31.28M17.51M44.13M
Investing Cash Flow
-12.55M-1.51M-50.79M-41.08M-94.41M
Financing Cash Flow
-10.85M-23.35M29.00M28.78M45.32M

HF Foods Group Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price3.58
Price Trends
50DMA
3.94
Negative
100DMA
3.31
Positive
200DMA
3.36
Positive
Market Momentum
MACD
-0.08
Positive
RSI
39.46
Neutral
STOCH
7.15
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HFFG, the sentiment is Neutral. The current price of 3.58 is below the 20-day moving average (MA) of 3.88, below the 50-day MA of 3.94, and above the 200-day MA of 3.36, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 39.46 is Neutral, neither overbought nor oversold. The STOCH value of 7.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HFFG.

HF Foods Group Risk Analysis

HF Foods Group disclosed 1 risk factors in its most recent earnings report. HF Foods Group reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

HF Foods Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$2.55B41.8112.90%7.85%79.89%
69
Neutral
$223.26M11.5412.29%3.62%11.68%82.59%
63
Neutral
$633.67M2,245.98-1.38%4.70%-2.66%8.18%
63
Neutral
$6.96B11.512.80%3.85%2.70%-24.43%
DIDIT
58
Neutral
$65.19M42.051.35%0.71%6.03%-83.00%
51
Neutral
$191.91M-18.85%4.71%-1754.14%
48
Neutral
$1.41B-4.11%6.62%53.12%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HFFG
HF Foods Group
3.58
0.17
4.99%
DIT
Amcon Distributing Company
102.98
-34.98
-25.36%
WILC
Willi Food Inte
15.82
6.71
73.66%
SPTN
SpartanNash Co
18.09
-0.66
-3.52%
CHEF
The Chefs' Warehouse
61.38
22.49
57.83%
UNFI
United Natural Foods
22.13
8.32
60.25%

HF Foods Group Corporate Events

Executive/Board ChangesShareholder Meetings
HF Foods Group Appoints New Board Member Amid Changes
Neutral
Jun 5, 2025

On June 1 and June 2, 2025, HF Foods Group Inc. experienced the resignations of directors Lisa Lim and Charlotte Westfall, effective June 2, 2025, without any disagreements related to company operations. Consequently, they did not stand for re-election at the annual meeting on June 3, 2025. Dennis Lam, a certified public accountant with extensive experience in audit and advisory services, was appointed to the board effective June 4, 2025, filling one of the vacancies. Lam will serve as the Chair of the Audit Committee and a member of the Compensation and Nominating and Governance Committees. Additionally, the Compensation Committee approved increases in cash and equity compensation for independent directors, effective July 1, 2025.

The most recent analyst rating on (HFFG) stock is a Buy with a $7.00 price target. To see the full list of analyst forecasts on HF Foods Group stock, see the HFFG 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.