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SunOpta Inc (STKL)
:STKL
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SunOpta
(NASDAQ:STKL)
Rating:59Neutral
Price Target:
$6.00
▲(4.90%Upside)
Positive Factors
Financial Performance
SunOpta's raised guidance for 2025 suggests further upside potential, supporting the Outperform rating.
Financial Strategy
STKL authorized a buyback authorization, showing confidence in its financial position.
Growth Potential
SunOpta is experiencing double-digit volume growth, which indicates strong demand for its products.
Negative Factors
Guidance Concerns
Q4's modest upside to revenue & EBITDA was overshadowed by lighter gross margin, including growth investments & temporary supply chain dislocation, and lighter FY25 guidance for revenue and EBITDA.
Margin Pressure
Gross margin of 10.3% was slightly below our 15.3% estimate due to additional depreciation from newly launched production assets, along with short-term investments aimed at enhancing long-term supply chain efficiency.
SunOpta (STKL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$672.34M
Dividend YieldN/A
Average Volume (3M)1.19M
Price to Earnings (P/E)―
Beta (1Y)1.01
Revenue Growth2.44%
EPS Growth91.41%
CountryUS
Employees1,248
SectorConsumer Defensive
Sector Strength62
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.04
Shares Outstanding117,542,310
10 Day Avg. Volume1,180,500
30 Day Avg. Volume1,193,644
Financial Highlights & Ratios
PEG Ratio-3.33
Price to Book (P/B)4.30
Price to Sales (P/S)0.00
P/FCF Ratio24.25
Enterprise Value/Market Cap1.55
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit10.33
Enterprise Value/Ebitda4.25
Forecast
1Y Price Target
$9.00Price Target Upside57.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
SunOpta Business Overview & Revenue Model
Company DescriptionSunOpta Inc. manufactures and sells plant-based and fruit-based food and beverage products to retail customers, foodservice distributors, branded food companies, and food manufacturers worldwide. The company operates through two segments, Plant-Based Foods and Beverages, and Fruit-Based Foods and Beverages. The Plant-Based Foods and Beverages segment provides plant-based beverages, and liquid and dry ingredients that utilizes almond, soy, coconut, oat, hemp, and other bases, as well as broths, teas, and nutritional beverages. This segment also packages dry- and oil-roasted in-shell sunflower and sunflower kernels; and processes and sells raw sunflower inshell and kernel for food and feed applications. The Fruit-Based Foods and Beverages segment offers individually quick frozen (IQF) fruits, such as strawberries, blueberries, mangos, pineapples, blends, and other berries for retail; and IQF and bulk frozen fruits, including purées, toppings, and smoothies for foodservice, and custom fruit preparations for industrial use. This segment also provides fruit snacks comprising bars, twists, ropes, and bite-sized products. The company was formerly known as Stake Technology Ltd. and changed its name to SunOpta Inc. in October 2003. SunOpta Inc. was founded in 1973 and is headquartered in Eden Prairie, Minnesota.
How the Company Makes MoneySunOpta makes money through several key revenue streams. Primarily, the company generates revenue by processing and selling plant-based food and beverage products to retail, foodservice, and industrial customers. This includes private label and branded products in categories such as plant-based milk, frozen fruit, and healthy snacks. Additionally, SunOpta benefits from strategic partnerships and long-term contracts with major retailers and food companies, which help ensure a steady demand for its products. The company's integrated supply chain, from sourcing raw materials to distributing finished products, also plays a crucial role in optimizing costs and maximizing profitability.
SunOpta Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 26.27%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call presents a positive outlook with revenue and EBITDA exceeding expectations due to strong category growth and operational improvements. However, there are concerns regarding gross margin pressures and challenges at the Midlothian facility, which could impact future performance. The company's proactive approach to mitigating these issues and strong financial metrics provide confidence in continued growth.Q1-2025 Updates
Positive Updates
Revenue Growth Exceeds Expectations
Q1 revenue increased by 9%, driven by 12% volume growth. Adjusted EBITDA of $22.4 million exceeded expectations, leading to an increase in the lower end of fiscal year 2025 guidance.
Strong Category and Customer Performance
All categories are growing, with plant-based beverages expected to grow high-single-digits and better-for-you fruit snacks and protein shakes exceeding 15% growth. Top five customers delivered year-over-year growth in Q1 2025.
Increased Production Capacity
The company's aseptic network increased Q1 volume production by over 6% from Q4 2024, and fruit snacks network produced 7% more units in Q1 2025 than in Q1 2024 with the same equipment.
Improved Financial Metrics
Debt decreased by $4 million to $261 million, with leverage reduced to 2.9 times. Cash generation was strong with $22 million of cash provided by operating activities.
Negative Updates
Gross Margin Decrease
Adjusted gross margin decreased by 170 basis points to 15.3%, due to investments in talent and infrastructure, inefficiencies at the Midlothian facility, and incremental depreciation.
Midlothian Facility Challenges
A more restrictive regulatory environment and subscale wastewater management system at the Midlothian facility is causing a bottleneck. This is expected to result in $500,000 per quarter in excess wastewater haul-off fees until mid-2026.
Company Guidance
During SunOpta's first quarter fiscal 2025 earnings conference call, the company provided several key metrics and guidance updates. Revenue for Q1 increased by 9%, driven by a 12% growth in volume, and adjusted EBITDA exceeded expectations at $22.4 million. The company raised the lower end of its fiscal year 2025 revenue guidance to a range of $788 million to $805 million, reflecting 9% to 11% growth, and adjusted EBITDA guidance to between $99 million and $103 million, representing a 12% to 16% increase. SunOpta also outlined its four-point plan aimed at improving gross margins, with targets of 18% to 19% for Q4 2025 and a full-year gross margin reaching 20% plus by 2027. The company expressed confidence in its long-term revenue growth target of approximately 10%, supported by a robust new business pipeline valued at nearly 25% of annual sales volume. Additionally, SunOpta announced a $25 million share repurchase program, underscoring its commitment to shareholder value creation while maintaining a focus on reducing leverage to 2.5 times by the end of 2025.SunOpta Financial Statement Overview
Summary
SunOpta's financial performance shows signs of operational efficiency improvements with increasing revenues and margins. However, ongoing profitability challenges and high leverage pose risks. Positive trends in free cash flow are encouraging, but sustainable profitability is still a challenge.Income Statement
SunOpta's income statement shows a modest revenue growth of 2.60% in the TTM, with improving EBIT and EBITDA margins of 3.23% and 8.15% respectively. However, the company is still operating at a net loss with a negative net profit margin of -2.02%, indicating ongoing challenges in achieving profitability.55
Neutral
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 2.42, suggesting significant leverage which could pose risks. The return on equity is negative due to net losses, but the company maintains an equity ratio of 22.42%, indicating a stable asset base.60
Neutral
Cash Flow
SunOpta's cash flow statement highlights a positive free cash flow growth of 52.07% in the TTM, with strong operating cash flow to net income ratio of -4.46, suggesting solid operational performance despite net losses. However, free cash flow to net income is negative, reflecting challenges in turning profits into free cash.62
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 742.51M | 723.73M | 630.30M | 934.66M | 812.62M | 789.21M | Gross Profit |
| 100.68M | 96.30M | 88.62M | 122.85M | 98.08M | 109.08M | EBIT |
| 24.00M | 15.59M | 8.27M | 1.13M | 2.37M | -12.72M | EBITDA |
| 60.54M | 53.71M | 38.22M | 41.31M | 36.08M | 11.16M | Net Income Common Stockholders |
| -15.00M | -17.39M | -175.02M | -9.52M | -4.14M | -47.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 306.00K | 1.55M | 306.00K | 679.00K | 227.00K | 251.00K | Total Assets |
| 669.42M | 668.53M | 669.42M | 855.85M | 755.12M | 585.62M | Total Debt |
| 396.74M | 381.57M | 379.14M | 399.12M | 275.83M | 107.06M | Net Debt |
| 396.43M | 380.02M | 378.83M | 398.44M | 275.61M | 106.80M | Total Liabilities |
| 493.89M | 519.93M | 493.89M | 508.58M | 421.99M | 252.69M | Stockholders Equity |
| 175.53M | 148.59M | 175.53M | 347.27M | 333.13M | 332.93M |
| Cash Flow | Free Cash Flow | ||||
| 27.53M | 18.10M | -31.28M | -68.05M | -104.80M | 66.94M | Operating Cash Flow |
| 66.97M | 50.03M | 14.84M | 60.58M | -21.43M | 91.70M | Investing Cash Flow |
| -35.87M | -18.68M | 44.03M | -106.82M | -94.45M | 324.52M | Financing Cash Flow |
| -31.91M | -31.09M | -50.80M | 46.70M | 115.86M | -417.68M |
SunOpta Technical Analysis
Negative
5.72
Price Trends
5.07
Positive
5.81
Negative
6.35
Negative
Market Momentum
0.14
Positive
50.56
Neutral
10.43
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STKL, the sentiment is Negative. The current price of 5.72 is below the 20-day moving average (MA) of 6.03, above the 50-day MA of 5.07, and below the 200-day MA of 6.35, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 50.56 is Neutral, neither overbought nor oversold. The STOCH value of 10.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STKL.
SunOpta Risk Analysis
SunOpta disclosed 43 risk factors in its most recent earnings report. SunOpta 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 3 New Risks
1.
If the material weaknesses we have identified in our internal control over financial reporting persist or if we fail to establish and maintain effective internal control over financial reporting, our ability to accurately report our financial results could be adversely affected Q4, 2022
2.
Increases in interest rates or changes in our credit ratings may negatively impact our cost of borrowing and access to capital financing Q4, 2022
3.
Our ability to maintain current levels of working capital may be adversely affected if we are unable to utilize supply chain financing ("SCF") programs to extend payment terms for certain suppliers, and accelerate payment terms for certain customers Q4, 2022
SunOpta Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $266.27M | 27.26 | 6.42% | ― | 2.00% | -37.09% | |
73 Outperform | $380.08M | 37.65 | 14.73% | ― | 12.84% | -22.88% | |
71 Outperform | $636.62M | 16.82 | 6.35% | ― | 4.01% | 22.46% | |
65 Neutral | $8.88B | 15.03 | 4.75% | 203.74% | 3.58% | -2.49% | |
59 Neutral | $672.34M | ― | -5.95% | ― | 2.44% | 91.41% | |
47 Neutral | $363.88M | ― | -32.48% | 16.45% | -7.06% | -83.82% | |
44 Neutral | $159.75M | ― | -31.83% | ― | -8.50% | -186.18% |
* Consumer Defensive Sector Average
Performance Comparison
STKL
SunOpta
5.72
0.08
1.42%
BGS
B&G Foods
4.56
-3.87
-45.91%
LWAY
Lifeway Foods
25.00
12.45
99.20%
NATR
Nature's Sunshine Products
14.30
-0.77
-5.11%
SENEA
Seneca Foods
92.29
34.94
60.92%
HAIN
Hain Celestial
1.87
-5.40
-74.28%
SunOpta Corporate Events
Executive/Board ChangesShareholder Meetings
SunOpta Holds Annual Shareholders Meeting, Key Decisions Made
Neutral
May 27, 2025
On May 22, 2025, SunOpta Inc. held its Annual and Special Meeting of Shareholders where key decisions were made, including the election of eight directors and the appointment of Ernst & Young LLP as the independent auditor for the upcoming year. Additionally, shareholders approved an amendment to the employee stock purchase plan, eliminating its termination date, and reconfirmed the company’s shareholder rights plan, reflecting continued support for the company’s strategic direction.
The most recent analyst rating on (STKL) stock is a Buy with a $10.00 price target. To see the full list of analyst forecasts on SunOpta stock, see the STKL Stock Forecast page.
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
SunOpta Announces $25 Million Share Repurchase Program
Positive
May 7, 2025
On May 7, 2025, SunOpta announced a share repurchase program of up to $25 million, allowing flexibility in acquiring shares based on market conditions and financial priorities. The company reported a 9% increase in revenue to $202 million for the first quarter of 2025, driven by volume growth, and raised its 2025 outlook, highlighting strong cash flow and a focus on margin improvement and deleveraging.
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.