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Where Food Comes From (WFCF)
NASDAQ:WFCF
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Where Food Comes From (WFCF) AI Stock Analysis

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WFCF

Where Food Comes From

(NASDAQ:WFCF)

Rating:73Outperform
Price Target:
$12.50
▼(-0.16% Downside)
Where Food Comes From demonstrates strong financial health and positive earnings call sentiment, driving a solid overall score. Technical analysis and valuation present moderate risks, but the company's strategic initiatives and growth potential support a favorable outlook.

Where Food Comes From (WFCF) vs. SPDR S&P 500 ETF (SPY)

Where Food Comes From Business Overview & Revenue Model

Company DescriptionWhere Food Comes From (WFCF) is a leading provider of verification and certification services for the food supply chain, focusing on promoting transparency and sustainability in agriculture. The company operates in various sectors, including food safety, traceability, and sustainability, offering a range of products and services that help businesses demonstrate their commitment to responsible sourcing practices. WFCF's core services include the certification of sustainable farming practices, auditing for compliance with food safety standards, and providing traceability solutions that connect consumers with the origins of their food.
How the Company Makes MoneyWhere Food Comes From generates revenue through multiple streams, primarily by offering certification and verification services to producers, processors, and retailers in the food industry. The company charges fees for its certification programs, which include audits and inspections necessary for compliance with various industry standards. Additionally, WFCF provides traceability services that help companies track their products throughout the supply chain, further enhancing its revenue. Significant partnerships with agricultural associations, food brands, and retailers also contribute to its earnings by expanding its client base and enhancing the credibility of its services.

Where Food Comes From Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted several positive developments, including growth in verification revenue, hardware sales, net income, and strategic investments. The expansion of the retail labeling program and integration of AI tools further support a positive outlook. However, challenges such as pressure on beef verifications and impacts on gross margins were noted. Overall, the highlights significantly outweigh the lowlights.
Q2-2025 Updates
Positive Updates
Increase in Verification and Certification Revenue
Core verification and certification revenue increased nearly 2%, driven by strong demand for CARE Certified and Upcycled programs.
Growth in Hardware Sales
Hardware sales increased year-over-year by 18% to $1 million, despite fewer basic tag sales, with higher demand for value-added tags.
Improved Net Income
Net income in Q2 increased 15% to $562,000, including a $172,000 gain in the fair market value of digital assets.
Strong Balance Sheet and Profitable Investment
Cash and cash equivalents rose to $3.2 million, boosted by a $1.8 million sale of a 10% interest in Progressive Beef, which was a profitable investment.
Expansion of Retail Labeling Program
Added two major retailers featuring CARE Certified beef products, expanding to over 100 locations by year-end.
Integration of Artificial Intelligence
Progress in integrating AI tools to improve efficiency and enhance customer experiences.
Share Repurchase Program
Repurchased 24,481 shares in Q2, with a total of 55,826 shares year-to-date, contributing to $14.6 million in value returned to shareholders.
Negative Updates
Pressure on Beef Verifications
Continued pressure on beef verifications due to smaller herd sizes affected revenue growth.
Impact on Gross Margins
Gross margins were negatively impacted by higher compensation costs related to a tight labor market and rising hardware costs.
Company Guidance
During the Where Food Comes From Second Quarter 2025 Earnings Call, the company reported a 3% increase in total revenue to $6.6 million, up from $6.4 million year-over-year, driven by a 2% rise in core verification and certification revenue and an 18% increase in hardware sales. Net income for Q2 grew by 15% to $562,000, or $0.11 per share, from $489,000, or $0.09 per share, the previous year. The company highlighted a $172,000 gain in the fair market value of digital assets and a strong balance sheet with cash and cash equivalents rising to $3.2 million from $2 million at year-end. The sale of a 10% interest in Progressive Beef added $1.8 million in cash, enhancing financial flexibility for growth initiatives. Additionally, the company expanded its retail labeling program, integrating CARE Certified beef products in stores across the U.S., and continued to repurchase shares, with 55,826 shares bought back year-to-date. Integration of AI tools was also noted as a key investment for improving efficiency.

Where Food Comes From Financial Statement Overview

Summary
The company shows strong revenue growth and effective cash flow management, with a conservative balance sheet. However, fluctuations in margins and equity levels require attention.
Income Statement
75
Positive
The income statement shows a strong revenue growth rate of 65.7% in the TTM period, indicating robust top-line expansion. Gross profit margin is healthy at approximately 40%, though it has slightly decreased from previous years. Net profit margin is stable at around 8%, reflecting consistent profitability. However, EBIT and EBITDA margins have seen some fluctuations, suggesting potential volatility in operating efficiency.
Balance Sheet
70
Positive
The balance sheet is solid with a low debt-to-equity ratio of 0.25, indicating conservative leverage. Return on equity is strong at 21%, showcasing effective use of shareholder funds. The equity ratio stands at 60%, reflecting a stable financial structure. However, the slight decrease in stockholders' equity over the periods could be a point of concern.
Cash Flow
80
Positive
Cash flow analysis reveals a significant free cash flow growth rate of 184.1% in the TTM period, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is healthy, indicating good cash conversion. Free cash flow to net income ratio is close to 1, suggesting efficient cash management. However, past periods show some volatility in free cash flow growth.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue25.60M25.75M25.14M24.84M21.93M20.08M
Gross Profit10.23M10.56M10.52M10.47M9.74M8.93M
EBITDA3.54M3.63M3.33M3.53M3.10M2.86M
Net Income2.05M2.12M2.15M1.99M2.96M1.39M
Balance Sheet
Total Assets16.62M15.31M16.29M18.30M19.78M19.45M
Cash, Cash Equivalents and Short-Term Investments3.20M2.01M2.64M4.37M5.41M4.37M
Total Debt2.48M2.55M2.80M3.13M3.37M4.60M
Total Liabilities6.65M5.37M5.47M5.82M6.04M6.98M
Stockholders Equity9.97M9.93M10.82M12.48M13.75M12.46M
Cash Flow
Free Cash Flow2.54M2.57M2.67M2.39M2.81M1.99M
Operating Cash Flow2.67M2.73M2.82M2.65M3.02M2.45M
Investing Cash Flow-131.00K-159.00K-648.00K-267.00K-3.00K-730.00K
Financing Cash Flow-1.94M-3.20M-3.90M-3.43M-1.98M14.00K

Where Food Comes From Technical Analysis

Technical Analysis Sentiment
Positive
Last Price12.52
Price Trends
50DMA
11.26
Positive
100DMA
10.93
Positive
200DMA
11.49
Positive
Market Momentum
MACD
0.25
Negative
RSI
75.86
Negative
STOCH
65.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WFCF, the sentiment is Positive. The current price of 12.52 is above the 20-day moving average (MA) of 11.42, above the 50-day MA of 11.26, and above the 200-day MA of 11.49, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 75.86 is Negative, neither overbought nor oversold. The STOCH value of 65.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WFCF.

Where Food Comes From Risk Analysis

Where Food Comes From disclosed 21 risk factors in its most recent earnings report. Where Food Comes From 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 0 New Risks

Where Food Comes From Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$64.68M32.4120.82%-0.45%-1.40%
70
Outperform
$296.08M48.8014.17%0.44%9.73%22.33%
64
Neutral
$10.72B16.047.75%2.00%2.65%-15.66%
$110.27M
51
Neutral
$124.25M-274.34%172.93%34.97%
50
Neutral
$49.88M-15.90%-2.63%-1080.14%
48
Neutral
$76.21M-269.26%93.83%23.31%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WFCF
Where Food Comes From
12.52
1.16
10.21%
TRAK
ReposiTrak
16.20
-2.58
-13.74%
TROO
TROOPS
1.02
-3.15
-75.54%
DUOT
Duos Technologies Group
6.40
4.18
188.29%
INLX
Intellinetics
11.14
0.96
9.43%
PSQH
PSQ Holdings
1.66
-0.98
-37.12%

Where Food Comes From Corporate Events

M&A TransactionsBusiness Operations and Strategy
Where Food Comes From Finalizes Agreement with Progressive Beef
Positive
Jul 23, 2025

On July 22, 2025, Where Food Comes From, Inc. finalized a Redemption and Purchase Agreement with Progressive Beef, LLC, resulting in the redemption of the company’s 10% membership interest in Progressive Beef for approximately $1.8 million in cash and the surrender of 12,585 shares of the company’s common stock. This transaction marks the end of an investment that began on August 9, 2018, when the company acquired a 10% stake in Progressive Beef for about $1.0 million, which over the years yielded over $1.6 million in dividends, reflecting Progressive Beef’s earnings distribution.

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.Date of analysis: Aug 19, 2025