United Natural Foods (UNFI) AI Stock Analysis

• Market Cap: $1.74B
• Dividend Yield: N/A
• Average Volume (3M): 611.47K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.12
• Revenue Growth: 4.73%
• EPS Growth: 29.70%
• Country: US
• Employees: 28,333
• Sector: Consumer Defensive
• Sector Strength: 72
• Industry: Food Distribution
• EPS (TTM): 0.22
• Shares Outstanding: 60,524,147
• 10 Day Avg. Volume: 571,523
• 30 Day Avg. Volume: 611,469
• PEG Ratio: -1.60
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.23
• Enterprise Value/Market Cap: 3.07
• Enterprise Value/Revenue: 0.04
• Enterprise Value/Gross Profit: 1.28
• Enterprise Value/Ebitda: 3.49
• 1Y Price Target: $29.00
• Price Target Upside: 5.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 56 Neutral
• Price Target: $29.00 ▲(5.92%Upside)

The overall score reflects a positive outlook from the recent earnings call, with strong sales and EBITDA growth and improved cash flow being significant strengths. However, challenges in profitability and valuation weigh on the score. Technical indicators suggest moderate strength.

Positive Factors

Earnings

UNFI reported adjusted EBITDA beating consensus due to better sales and expense management.

Financial Performance

Management raised the bottom-end of EBITDA guidance by 4%.

Operational Improvements

Operational improvements are supported by stronger sales and solid operating expense leverage.

Negative Factors

Customer Base Challenges

There is caution given the longer-term structural pressures facing its customer base, excluding Whole Foods.

Industry Competition

UNFI operates in a highly competitive industry with sub-scale customers that face sizable headwinds, making sustained earnings growth challenging.

Sales Trends

New disclosures suggest weak natural sales trends, excluding Whole Foods, implying a high reliance on low-margin Whole Foods for top-line growth.

United Natural Foods Business Overview & Revenue Model

Company Description

United Natural Foods, Inc. (UNFI) is a leading distributor of natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. The company operates within the wholesale distribution sector, providing a comprehensive range of products to a variety of customers including natural product superstores, independent retailers, conventional supermarket chains, e-commerce platforms, and food service providers. UNFI is committed to offering an extensive selection of high-quality and sustainable products to meet the growing consumer demand for health and wellness options.

How the Company Makes Money

UNFI generates revenue primarily through its wholesale distribution services by purchasing products from manufacturers and suppliers and selling them to its diverse customer base, which includes grocery stores, supermarkets, and food service businesses. Key revenue streams include the sale of natural and organic foods, specialty products, and conventional grocery items. The company also earns from providing value-added services such as marketing support, merchandising assistance, and logistical solutions. In addition, UNFI's partnerships with leading grocery retailers, including its significant supply arrangement with Whole Foods Market, owned by Amazon, contribute notably to its earnings by ensuring consistent demand for its products. UNFI's strategic acquisitions and expansion into different geographic markets further bolster its revenue by increasing its distribution network and customer reach.

United Natural Foods Financial Statement Overview

Summary

United Natural Foods shows modest revenue growth but struggles with profitability, evidenced by a negative net income and low EBIT margin. The balance sheet reveals high leverage with a significant debt-to-equity ratio, although positive trends in cash flow offer some stability. Despite challenges, resilience in cash flow and revenue growth provide a foundation for potential improvement.

Income Statement

United Natural Foods shows modest revenue growth, with a slight increase in total revenue from $30.72 billion to $31.68 billion in TTM (Trailing-Twelve-Months). However, profitability remains a concern as the company reported a negative net income in TTM, with a net profit margin of approximately -0.26%. Gross profit margin is stable at around 13.16%, but the EBIT margin is quite low at 0.23%, indicating operational inefficiencies. The company needs to improve its cost management and operational efficiency to enhance profitability.

Balance Sheet

The balance sheet indicates a relatively high debt-to-equity ratio of approximately 2.29, suggesting significant leverage. While the equity ratio stands at about 21.02%, indicating a fair proportion of assets financed by equity, the return on equity is negative due to the net loss, highlighting the need for improved profitability. The company should focus on managing its debt levels and enhancing equity returns to strengthen its financial position.

Cash Flow

The cash flow statement reveals a positive trend in operating cash flow, increasing from $253 million to $461 million in the TTM. Free cash flow has improved significantly, turning positive at $203 million from a negative position previously. The operating cash flow to net income ratio is favorable due to strong operating cash flows despite the net loss. Continued focus on cash flow generation can provide stability and support financial obligations.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
31.68B	30.98B	30.27B	28.93B	26.95B	26.51B
	Gross Profit
4.17B	4.20B	4.13B	4.18B	3.94B	3.87B
	EBIT
72.00M	8.00M	120.00M	423.00M	439.00M	376.07M
	EBITDA
408.00M	356.00M	502.00M	684.00M	599.00M	115.00M
	Net Income Common Stockholders
-82.00M	-112.00M	24.00M	248.00M	149.00M	-254.01M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
44.00M	40.00M	37.00M	44.00M	41.00M	46.99M
	Total Assets
7.73B	7.53B	7.39B	7.63B	7.53B	7.59B
	Total Debt
3.72B	3.55B	3.27B	3.38B	3.43B	3.66B
	Net Debt
3.67B	3.51B	3.23B	3.34B	3.39B	3.61B
	Total Liabilities
6.11B	5.89B	5.65B	5.84B	6.01B	6.44B
	Stockholders Equity
1.63B	1.64B	1.74B	1.79B	1.51B	1.14B
Cash Flow		Free Cash Flow
203.00M	-92.00M	301.00M	80.00M	304.00M	283.97M
	Operating Cash Flow
461.00M	253.00M	624.00M	331.00M	614.00M	456.54M
	Investing Cash Flow
-300.00M	-342.00M	-339.00M	-49.00M	-237.00M	-1.47M
	Financing Cash Flow
-150.00M	92.00M	-292.00M	-279.00M	-384.00M	-453.07M

United Natural Foods Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 27.38
• 50DMA: Positive
• 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 UNFI, the sentiment is Neutral. The current price of 27.38 is below the 20-day moving average (MA) of 29.46, above the 50-day MA of 27.26, and above the 200-day MA of 24.62, indicating a neutral trend. The MACD of 0.46 indicates Positive momentum. The RSI at 42.77 is Neutral, neither overbought nor oversold. The STOCH value of 6.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UNFI.

United Natural Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USFD	77 Outperform	$18.04B	35.56	11.16%	―	6.32%	5.69%
PFGC	76 Outperform	$13.87B	36.51	9.05%	―	6.20%	-10.58%
CHEF	74 Outperform	$2.52B	41.29	12.90%	―	7.85%	79.89%
SYY	73 Outperform	$35.69B	19.05	94.91%	2.80%	3.55%	-5.79%
Sector *	65 Neutral	$8.94B	14.99	4.76%	203.76%	3.54%	-2.49%
SPTN	63 Neutral	$636.72M	2,245.98	-1.38%	4.74%	-2.66%	8.18%
UNFI	56 Neutral	$1.74B	―	-4.94%	―	4.73%	29.70%

United Natural Foods Corporate Events

United Natural Foods Clarifies Legal Status of 8-K Report

United Natural Foods has issued a Current Report on Form 8-K, clarifying that the information provided is not considered ‘filed’ under the Securities Exchange Act of 1934, nor subject to its liabilities. This announcement ensures stakeholders understand the legal status of the information and its limitations regarding incorporation into future filings.