Rocky Mountain Chocolate Factory (RMCF) AI Stock Analysis

• Market Cap: $12.64M
• Dividend Yield: N/A
• Average Volume (3M): 95.36K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.51
• Revenue Growth: 8.09%
• EPS Growth: 17.25%
• Country: US
• Employees: 135
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Food Confectioners
• EPS (TTM): -0.09
• Shares Outstanding: 7,800,508
• 10 Day Avg. Volume: 35,648
• 30 Day Avg. Volume: 95,362
• PEG Ratio: -0.06
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 0.38
• P/FCF Ratio: -1.09
• Enterprise Value/Market Cap: 1.48
• Enterprise Value/Revenue: 0.62
• Enterprise Value/Gross Profit: 3.83
• Enterprise Value/Ebitda: -6.64
• 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: 42 Neutral
• Price Target: $1.50 ▼(-7.41% Downside)

Rocky Mountain Chocolate Factory's overall stock score is primarily impacted by its poor financial performance, characterized by declining profitability and increased financial risk. The technical analysis indicates weak momentum, while the valuation is unattractive due to a negative P/E ratio. Although the earnings call provided some positive insights into strategic initiatives, the ongoing financial challenges overshadow these efforts.

Rocky Mountain Chocolate Factory Business Overview & Revenue Model

Company Description

Rocky Mountain Chocolate Factory (RMCF) is a premium chocolate manufacturer and retailer based in the United States, specializing in handcrafted chocolates, fudge, caramel, and a variety of confections. Established in 1981, RMCF operates in the confectionery sector and is well-known for its commitment to quality and artisanal production methods. The company primarily sells its products through franchise locations, retail stores, and an online platform, catering to both individual customers and wholesale clients.

How the Company Makes Money

Rocky Mountain Chocolate Factory generates revenue through multiple streams, including retail sales from its franchised and company-owned stores, e-commerce sales via its website, and wholesale distribution to various retailers. The company’s franchise model allows it to expand its brand presence while earning franchise fees and royalties from franchisees. Additionally, RMCF engages in seasonal promotions and custom packaging services, which attract corporate clients looking for gifts and promotional items. Strategic partnerships with retailers and participation in events also contribute to its earnings, enabling RMCF to reach a broader audience and enhance brand visibility.

Rocky Mountain Chocolate Factory Financial Statement Overview

Summary

Rocky Mountain Chocolate Factory is facing significant financial challenges, including declining revenue, negative profitability margins, increased leverage, and negative cash flows. These issues highlight operational inefficiencies and market pressures, posing substantial financial risks.

Income Statement

Rocky Mountain Chocolate Factory has experienced declining revenue with a negative trend in profitability margins. The gross profit margin has decreased from 36.9% in 2020 to 11% in 2025, indicating cost pressures or inefficiencies. The net profit margin has been negative over recent years, with a downward trajectory from 3.2% in 2020 to -20.7% in 2025. Revenue growth has been unstable, with significant declines, especially evident from 2024 to 2025. This trend reflects challenges in maintaining a stable revenue stream and profitability.

Balance Sheet

The company's financial leverage has increased, with the debt-to-equity ratio rising from 0.14 in 2020 to 1.03 in 2025, indicating higher financial risk. The equity ratio has declined, reflecting a reduced buffer to absorb potential losses. Additionally, return on equity has been consistently negative due to ongoing net losses, showcasing poor returns for shareholders. The balance sheet indicates a weakened financial position and reduced investor confidence.

Cash Flow

Operating cash flow has turned negative, with significant declines from 2020 to 2025, reflecting operational challenges. Free cash flow has also deteriorated, indicating insufficient cash generation to cover capital expenditures. The operating cash flow to net income ratio is negative, further highlighting inefficiencies in converting income into cash. The cash flow situation poses liquidity risks and limits the company's financial flexibility.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	29.99M	29.58M	27.95M	30.43M	29.49M	21.76M
Gross Profit	4.88M	3.25M	4.71M	8.15M	8.96M	4.52M
EBITDA	-2.82M	-4.72M	-3.94M	-4.10M	223.65K	-282.87K
Net Income	-4.73M	-6.12M	-4.17M	-5.68M	-341.70K	-899.78K
Balance Sheet
Total Assets	22.25M	21.18M	20.58M	21.99M	26.88M	24.95M
Cash, Cash Equivalents and Short-Term Investments	2.02M	720.00K	2.08M	4.72M	7.59M	5.63M
Total Debt	9.44M	7.21M	2.94M	2.39M	1.81M	1.96M
Total Liabilities	16.13M	14.20M	9.94M	7.62M	7.48M	5.98M
Stockholders Equity	6.13M	6.97M	10.64M	14.37M	19.40M	18.97M
Cash Flow
Free Cash Flow	-3.52M	-10.36M	-5.45M	-3.10M	1.92M	-181.22K
Operating Cash Flow	-1.06M	-6.59M	-2.44M	-2.10M	2.86M	67.35K
Investing Cash Flow	-2.19M	-1.66M	-1.45M	-767.82K	-605.00K	-70.99K
Financing Cash Flow	4.30M	6.89M	1.25M	0.00	-299.06K	814.86K

Rocky Mountain Chocolate Factory Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMCF, the sentiment is Negative. The current price of 1.62 is below the 20-day moving average (MA) of 1.67, below the 50-day MA of 1.67, and above the 200-day MA of 1.51, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.14 is Neutral, neither overbought nor oversold. The STOCH value of 19.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RMCF.

Rocky Mountain Chocolate Factory Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSY	65 Neutral	$36.34B	26.81	31.01%	3.00%	4.71%	-23.03%
K	64 Neutral	$28.99B	22.82	32.52%	2.76%	-1.01%	25.47%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
MDLZ	62 Neutral	$73.37B	21.24	13.07%	3.42%	4.13%	-5.19%
TR	60 Neutral	$2.73B	30.59	10.48%	0.89%	0.34%	0.85%
DNUT	53 Neutral	$676.64M	―	-55.07%	3.66%	-10.40%	-1904.10%
RMCF	42 Neutral	$12.64M	―	-56.79%	―	8.09%	17.25%

Rocky Mountain Chocolate Factory Corporate Events

Rocky Mountain Chocolate Factory’s Strategic Shift Amidst Challenges

Rocky Mountain Chocolate Factory, Inc., a prominent franchiser of premium chocolate and confectionery retail stores, is recognized for its extensive line of gourmet chocolates and caramel apples, operating over 250 stores across the United States and internationally. In its recent earnings report for the second quarter of fiscal 2026, the company highlighted strategic transformations and operational improvements, despite facing financial challenges. The company reported a revenue increase to $6.8 million, up from $6.4 million in the previous year, driven by pricing strategies and a shift towards more profitable sales channels. However, the company faced a gross profit loss of $33,000 due to higher input costs and operational inefficiencies, maintaining a net loss of $0.7 million, consistent with the previous year’s quarter. The company is actively rebranding and expanding its store footprint, with new franchise locations and a flagship store planned for Chicago. Looking ahead, Rocky Mountain Chocolate Factory aims to leverage its strengthened leadership and operational strategies to achieve sustainable growth and value creation for its stakeholders.

Rocky Mountain Chocolate Factory’s Earnings Call: Balancing Growth and Challenges

Rocky Mountain Chocolate Factory’s recent earnings call painted a picture of a company in transition, balancing promising developments with ongoing financial challenges. The sentiment expressed during the call was one of cautious optimism, highlighting efforts in brand modernization and franchise expansion that have contributed to revenue growth. However, the company is also grappling with financial hurdles, such as a negative gross profit, net loss, and increased borrowing.

Rocky Mountain Chocolate Factory Faces Nasdaq Compliance Issue

On September 15, 2025, Allen C. Harper resigned from the board of Rocky Mountain Chocolate Factory, Inc. due to other professional responsibilities, not due to any disagreement with the company. Subsequently, the company received a notice from Nasdaq indicating non-compliance with certain corporate governance requirements due to the resignation, specifically regarding the composition of independent directors on the board and audit committee. The company plans to address this issue by appointing an additional independent director before the cure period ends in September 2026. This non-compliance does not currently affect the company’s stock listing or trading on Nasdaq.

The most recent analyst rating on (RMCF) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Rocky Mountain Chocolate Factory stock, see the RMCF Stock Forecast page.

Rocky Mountain Chocolate Factory Secures $1.2 Million Credit

On August 28, 2025, Rocky Mountain Chocolate Factory, Inc. entered into a credit agreement with RMCF2 Credit, LLC, securing a $1.2 million advance to support capital investment and working capital needs. The agreement, which includes a promissory note maturing in 2027, outlines financial covenants and a deed of trust on the company’s property in Durango, Colorado. Additionally, the company amended a previous credit agreement with RMC Credit Facility, LLC, obtaining an additional $600,000 advance under similar terms. Both agreements include waivers for certain financial covenants for the fiscal quarters ending August 31 and November 30, 2025.

The most recent analyst rating on (RMCF) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Rocky Mountain Chocolate Factory stock, see the RMCF Stock Forecast page.