Natural Alternatives International (NAII) AI Stock Analysis

• Market Cap: $16.18M
• Dividend Yield: N/A
• Average Volume (3M): 10.40K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.05
• Revenue Growth: 18.19%
• EPS Growth: -35.22%
• Country: US
• Employees: 296
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): -0.42
• 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: 7.35
• Enterprise Value/Revenue: 0.88
• Enterprise Value/Gross Profit: 10.29
• Enterprise Value/Ebitda: -326.75
• 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: 46 Neutral
• Price Target: $2.50 ▼(-20.63% Downside)
• Action: Reiterated Date: 02/15/26
• Date: Action: Reiterated 02/15/26

The score is held down primarily by weak profitability (operating and net losses with low gross margin) and increased leverage, despite a strong TTM revenue rebound. Technical signals also remain soft (negative MACD, sub-50 RSI, and price below short-term moving averages). Positive operating and free cash flow provide some support, but losses and volatility keep the overall profile pressured.

Positive Factors

Strong revenue rebound

A sustained 54.9% TTM revenue rebound signals recovering demand and execution across channels. Higher top-line supports better fixed-cost absorption for manufacturing capacity, strengthens customer retention economics, and gives management runway to invest in product and process improvements.

Positive operating & free cash flow

Consistent operating cash generation (~$6.4M) and positive free cash flow (~$1.7M) indicate the business converts sales into cash despite accounting losses. This supports working capital, debt servicing, and modest reinvestment, improving survivability during earnings volatility.

Diversified contract & branded model

A dual model—contract manufacturing for third parties plus owned branded products and proprietary ingredients—creates diversified revenue streams. Contract manufacturing yields recurring volume-based revenue while IP and branded sales provide upside and customer stickiness over the medium term.

Negative Factors

Low gross margin and net losses

Persistently thin gross margins (~8.1%) and sizeable net losses undermine capacity to fund R&D, marketing, and margin-enhancing investments. Low margin structure reduces resilience to input cost inflation and pricing pressure, making sustained profitability harder without structural change.

Rising leverage and covenant risk

Debt increased materially to ~$106.5M, raising leverage (~0.86x equity) and triggering covenant remediation. Higher debt raises interest expense, limits strategic flexibility, and increases refinancing risk, constraining long-term investment and elevating downside if sales fluctuate.

Earnings instability over recent years

Volatile profitability—moving from positive earnings to significant losses—signals inconsistent pricing, cost control, or product mix. This undermines forecasting, weakens negotiating leverage with suppliers/customers, and complicates long-term planning and capital allocation decisions.

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

NAII generates revenue primarily from two sources. (1) Contract Manufacturing: NAII earns money by providing manufacturing services to other companies (brands and marketers of nutritional supplements). Revenue in this segment typically comes from fees embedded in the sale of finished goods produced for customers—i.e., NAII manufactures and sells completed supplement products (such as capsules, tablets, powders, and related formats) to clients that then sell under their own brands. This stream is driven by production volumes, long-term customer relationships, and NAII’s manufacturing capabilities (including quality systems and regulatory compliance). (2) Branded Products: NAII also earns revenue from selling its own branded nutritional supplement products to consumers and/or retailers/distributors. In this model, revenue is generated from product sales under NAII-owned brands, with earnings influenced by brand demand, marketing, distribution reach, and pricing. In addition, NAII monetizes proprietary supplement ingredients and intellectual property by supplying those ingredients for use in products (either within contract-manufactured items or in broader ingredient sales) and supporting their commercialization through trademarks and patents. Specific details on material partnerships, customer concentration, or the relative contribution of each stream are null.

Natural Alternatives International Financial Statement Overview

Summary

Revenue rebounded sharply (+54.9% TTM), but profitability has deteriorated materially with low gross margin (~8.1%) and a significant net loss (~-14.4% net margin). Leverage has increased meaningfully (debt ~0.86x equity) after covenant issues, reducing flexibility. Positive operating cash flow (~$6.4M) and positive free cash flow (~$1.7M) are supportive, but FCF fell sharply versus the most recent annual period and earnings stability remains weak.

Income Statement

TTM (Trailing-Twelve-Months) results show a sharp revenue rebound (+54.9%), but profitability has deteriorated materially: gross margin is low (~8.1%) and the company is operating at a loss (negative operating margin and negative net margin of ~-14.4%), with a sizable net loss. Over the last several annual periods, the business swung from solid profits (2021–2022) to a small profit (2023) and then to significant losses (2024 and 2025), signaling weak earnings stability and likely cost/price or mix pressure despite improving sales.

Balance Sheet

Leverage has increased meaningfully versus earlier years: total debt rose to about $106.5M in TTM (Trailing-Twelve-Months) from roughly $59–60M in the last two annual reports, while equity is about $67.0M. Debt sits at ~0.86x equity, which is notably higher than 2021–2023 levels and reduces financial flexibility. With losses, return on equity is strongly negative in TTM (Trailing-Twelve-Months), though the company still has a meaningful equity base relative to total assets.

Cash Flow

Cash generation is a relative bright spot: TTM (Trailing-Twelve-Months) operating cash flow is positive (~$6.4M) and free cash flow is also positive (~$1.7M), showing the business can generate cash even while reporting accounting losses. However, free cash flow fell sharply versus the most recent annual period (large negative growth), and cash flow coverage versus earnings is only moderate, indicating cash performance may be volatile and not yet consistently strong.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	134.47M	129.86M	113.80M	154.01M	170.97M	178.52M
Gross Profit	11.56M	9.29M	6.87M	18.16M	30.51M	30.44M
EBITDA	-364.00K	-2.70M	-4.46M	11.09M	20.66M	16.58M
Net Income	-12.25M	-13.57M	-7.22M	2.52M	10.71M	10.77M
Balance Sheet
Total Assets	153.30M	151.94M	162.34M	134.15M	146.00M	120.28M
Cash, Cash Equivalents and Short-Term Investments	3.75M	12.32M	11.98M	13.60M	21.83M	32.13M
Total Debt	106.51M	59.03M	60.29M	30.93M	31.84M	16.48M
Total Liabilities	86.25M	83.51M	79.75M	45.38M	57.48M	40.20M
Stockholders Equity	67.05M	68.43M	82.59M	88.77M	88.52M	80.08M
Cash Flow
Free Cash Flow	-5.24M	2.32M	-4.51M	-6.50M	-14.62M	15.70M
Operating Cash Flow	-1.01M	5.93M	-1.50M	7.02M	11.87M	20.81M
Investing Cash Flow	-4.22M	-3.61M	-3.02M	-13.47M	-26.46M	-5.04M
Financing Cash Flow	326.00K	-1.97M	2.89M	-1.78M	4.29M	-14.11M

Natural Alternatives International Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NAII, the sentiment is Negative. The current price of 3.15 is above the 20-day moving average (MA) of 2.71, below the 50-day MA of 3.44, and below the 200-day MA of 3.33, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 35.48 is Neutral, neither overbought nor oversold. The STOCH value of 2.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NAII.

Natural Alternatives International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
NATR	61 Neutral	$402.67M	19.90	12.18%	―	6.62%	-7.85%
LFVN	56 Neutral	$59.49M	70.54	24.97%	2.81%	16.77%	143.30%
FTLF	55 Neutral	$121.33M	50.70	17.12%	―	12.44%	-20.33%
USNA	53 Neutral	$315.43M	33.56	2.03%	―	5.88%	-68.62%
NAII	46 Neutral	$16.18M	-2.11	-17.43%	―	18.19%	-35.22%
HAIN	45 Neutral	$60.50M	-0.21	-111.73%	―	-10.13%	-532.32%