Natural Alternatives International (NAII) AI Stock Analysis

• Market Cap: $26.81M
• Dividend Yield: N/A
• Average Volume (3M): 10.40K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.11
• Revenue Growth: 18.19%
• EPS Growth: -35.22%
• Country: US
• Employees: 296
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): -0.05
• Shares Outstanding: 6,176,778
• 10 Day Avg. Volume: 14,152
• 30 Day Avg. Volume: 10,400
• PEG Ratio: -0.02
• Price to Book (P/B): 0.29
• Price to Sales (P/S): 0.15
• P/FCF Ratio: 8.42
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: $4.50 ▲(42.86% Upside)

The score is held down primarily by weak financial performance (loss-making margins, pressured cash flow, and higher leverage). Technicals add some support due to a clear uptrend, but overbought signals increase near-term risk. Valuation remains unattractive due to negative earnings, while the credit agreement waiver is a modest positive that reduces immediate financing risk.

Positive Factors

Diversified Revenue Streams

Having both contract manufacturing and branded-product businesses plus proprietary ingredient commercialization creates multiple durable cash engines. Contract manufacturing offers recurring volume-based revenue, while branded and ingredient sales provide upside and strategic optionality over months.

High-margin Licensing

Licensing of patented/trademarked ingredients with 40%+ margins is a structural strength: high-margin licensing scales without proportional manufacturing lift, supports consolidated profitability if expanded, and leverages IP to create recurring, capital-light revenue over a multi-month horizon.

Credit Agreement Waiver Restores Stability

Securing a waiver for breached covenants removes an immediate default risk and preserves lender support, giving management time to execute operational fixes. This materially improves short-to-medium term survival prospects and reduces forced liquidity strain while longer-term repairs are implemented.

Negative Factors

Negative Profitability

Sustained negative net profit and EBIT margins undermine the firm's ability to self-fund growth or rebuild buffers. Persistent losses erode equity, constrain reinvestment, and force reliance on external financing or asset sales unless margins materially recover through pricing, mix, or cost action.

Weak Cash Generation

Declining free cash flow and weak OCF-to-net-income signal limited internal liquidity for capex, working capital, or debt servicing. Over several months this raises refinancing and covenant risk, restricts strategic investment, and increases the dependence on external capital to sustain operations.

Rising Leverage & Negative ROE

Increasing leverage paired with negative ROE indicates the company is funding operations with more debt while failing to generate equity returns. This structural imbalance raises insolvency sensitivity to shocks, elevates interest burden, and limits strategic flexibility until profitability and equity returns improve.

Natural Alternatives International Business Overview & Revenue Model

Company Description

Natural Alternatives International, Inc. engages in formulating, manufacturing, and marketing nutritional supplements in the United States, Europe, Asia, and internationally. The company operates in two segments, Private-Label Contract Manufacturing, and Patent and Trademark Licensing. It offers private-label contract manufacturing services to companies that market and distribute vitamins, minerals, herbal, and other nutritional supplements, as well as other health care products. The company also provides strategic partnering services, such as customized product formulation, clinical studies, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats and labeling design, scientific research, proprietary ingredients, customer-specific nutritional product formulation, product testing and evaluation, packaging and delivery system design, and regulatory review. In addition, it sells beta-alanine ingredient under the CarnoSyn and SR CarnoSyn names. The company manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. Its private-label contract manufacturing customers include companies that market nutritional supplements through direct sales marketing channels, direct to consumer e-commerce channels, and retail stores. Natural Alternatives International, Inc. was founded in 1980 and is headquartered in Carlsbad, California.

How the Company Makes Money

Natural Alternatives International generates revenue through several key streams, primarily from its contract manufacturing services, where it partners with brands to produce dietary supplements and functional foods under private labels. The company also earns income from the sale of its proprietary products, which are marketed directly to consumers and distributors. Additionally, NAII benefits from strategic partnerships with health and wellness brands that enable collaborative product development, leveraging its expertise in formulation and manufacturing. The company's focus on quality, compliance, and innovation has positioned it favorably in a competitive market, driving consistent revenue growth.

Natural Alternatives International Financial Statement Overview

Summary

Natural Alternatives International is facing financial challenges, with declining profitability and increasing leverage. While there is some revenue growth, the negative margins and cash flow issues highlight the need for strategic improvements to stabilize the company's financial health.

Income Statement

Natural Alternatives International has experienced declining profitability with negative net profit and EBIT margins in the TTM period. The revenue growth rate is positive at 3.53%, indicating some recovery, but the overall margins remain weak compared to previous years, highlighting challenges in maintaining profitability.

Balance Sheet

The company's debt-to-equity ratio has increased over time, indicating higher leverage, which could pose risks if not managed properly. Return on equity is negative, reflecting recent losses. However, the equity ratio remains relatively stable, suggesting a balanced asset structure.

Cash Flow

The cash flow situation is concerning, with a significant decline in free cash flow growth and a low operating cash flow to net income ratio. Although there is some operating cash flow, the negative free cash flow growth indicates potential liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	130.58M	129.86M	113.80M	154.01M	170.97M	178.52M
Gross Profit	10.56M	9.29M	6.87M	18.16M	30.51M	30.44M
EBITDA	-3.53M	-2.70M	-4.46M	11.09M	20.66M	16.58M
Net Income	-18.81M	-13.57M	-7.22M	2.52M	10.71M	10.77M
Balance Sheet
Total Assets	151.94M	151.94M	162.34M	134.15M	146.00M	120.28M
Cash, Cash Equivalents and Short-Term Investments	12.32M	12.32M	11.98M	13.60M	21.83M	32.13M
Total Debt	59.03M	59.03M	60.29M	30.93M	31.84M	16.48M
Total Liabilities	83.51M	83.51M	79.75M	45.38M	57.48M	40.20M
Stockholders Equity	68.43M	68.43M	82.59M	88.77M	88.52M	80.08M
Cash Flow
Free Cash Flow	7.95M	2.32M	-4.51M	-6.50M	-14.62M	15.70M
Operating Cash Flow	12.72M	5.93M	-1.50M	7.02M	11.87M	20.81M
Investing Cash Flow	-4.77M	-3.61M	-3.02M	-13.47M	-26.46M	-5.04M
Financing Cash Flow	-4.07M	-1.97M	2.89M	-1.78M	4.29M	-14.11M

Natural Alternatives International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NAII, the sentiment is Positive. The current price of 3.15 is below the 20-day moving average (MA) of 3.42, below the 50-day MA of 3.25, and below the 200-day MA of 3.27, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 81.57 is Negative, neither overbought nor oversold. The STOCH value of 92.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NAII.

Natural Alternatives International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NATR	80 Outperform	$384.90M	27.11	9.52%	―	6.62%	-7.85%
FTLF	71 Outperform	$145.56M	22.28	17.77%	―	12.44%	-20.33%
LFVN	66 Neutral	$82.43M	8.43	33.31%	2.81%	16.77%	143.30%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
USNA	54 Neutral	$365.80M	22.48	3.20%	―	5.88%	-68.62%
NAII	48 Neutral	$26.81M	-2.22	-15.93%	―	18.19%	-35.22%
HAIN	42 Neutral	$109.59M	-0.20	-75.51%	―	-10.13%	-532.32%

Natural Alternatives International Corporate Events

Natural Alternatives Resolves Credit Agreement Issues

Natural Alternatives International, Inc. announced that it failed to comply with certain financial covenants under its Credit Agreement with Wells Fargo Bank for its fiscal first quarter ending September 30, 2025. To address the issue, the company successfully negotiated a Waiver and Release Agreement with Wells Fargo on December 17, 2025, ensuring that all defaults were waived and the Credit Agreement remains fully operational. This resolution reinforces the company’s ability to maintain its financial arrangements and supports its ongoing operations, bringing stability for stakeholders moving forward.

The most recent analyst rating on (NAII) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on Natural Alternatives International stock, see the NAII Stock Forecast page.

Natural Alternatives International Holds Annual Stockholder Meeting

On December 5, 2025, Natural Alternatives International held its Annual Meeting of Stockholders where several key decisions were made. The stockholders approved the election of a Class II director, the First Amendment to the 2020 Omnibus Equity Incentive Plan, the ratification of Haskell & White LLP as the independent registered public accounting firm for the fiscal year ending June 30, 2026, the compensation of the company’s named executive officers, and a three-year frequency for non-binding votes on executive compensation.

The most recent analyst rating on (NAII) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on Natural Alternatives International stock, see the NAII Stock Forecast page.