Where Food Comes From (WFCF) AI Stock Analysis

• Market Cap: $64.32M
• Dividend Yield: N/A
• Average Volume (3M): 3.42K
• Price to Earnings (P/E): 32.2
• Beta (1Y): -0.03
• Revenue Growth: -1.17%
• EPS Growth: 43.94%
• Country: US
• Employees: 93
• Sector: Industrials
• Sector Strength: 72
• Industry: Software - Application
• EPS (TTM): 0.22
• Shares Outstanding: 5,168,176
• 10 Day Avg. Volume: 1,853
• 30 Day Avg. Volume: 3,425
• PEG Ratio: 12.95
• Price to Book (P/B): 7.09
• Price to Sales (P/S): 2.73
• P/FCF Ratio: 27.39
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 2.26
• Enterprise Value/Gross Profit: 5.69
• Enterprise Value/Ebitda: 12.87
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $12.50 ▼(-4.94% Downside)

Where Food Comes From's overall stock score of 60 reflects a mixed financial performance with strong profitability but declining revenue growth. Technical analysis indicates bearish momentum, while valuation metrics suggest moderate pricing. The earnings call highlights resilience and strategic management, contributing positively to the score.

Positive Factors

Strong Profitability Margins

Maintaining strong profitability margins indicates effective cost management and operational efficiency, which can support long-term financial health even amid revenue challenges.

Solid Balance Sheet

A strong balance sheet with no debt and significant cash reserves provides financial flexibility and stability, enabling the company to invest in growth opportunities and weather economic downturns.

Customer Retention

High customer retention rates suggest strong customer satisfaction and loyalty, which can lead to sustained revenue streams and provide a competitive edge in the market.

Negative Factors

Declining Revenue Growth

A significant decline in revenue growth can hinder the company's ability to expand and compete, potentially impacting its market position and long-term growth prospects.

Challenges in Beef Industry

Industry-specific challenges, such as supply chain issues and regulatory pressures, can limit growth opportunities and increase operational risks, affecting long-term performance.

Declining Hardware Sales

A decline in hardware sales indicates potential weaknesses in product demand or market saturation, which could impact revenue diversification and growth potential.

Where Food Comes From Business Overview & Revenue Model

Company Description

Where Food Comes From, Inc., together with its subsidiaries, provides verification and certification solutions for the agriculture, livestock, and food industries in the United States. The company operates through Verification and Certification, and Software Sales and Related Consulting segments. It conducts on-site and desk audits to verify that claims made about livestock, crops, and other food products are accurate, as well as offers Where Food Comes From Source Verified retail and restaurant labeling program, which connects consumers directly to the source of the food they purchase through product labeling, and web-based information sharing and education. The company also offers sustainability programs, compliance management, and software-as-a-service; maintenance, support, and software-related consulting services; and web-hosting services, as well as sells hardware. It serves beef and pork packers, organic producers and processors, and specialty retail chains. The company was formerly known as Integrated Management Information, Inc. and changed its name to Where Food Comes From, Inc. in December 2012. Where Food Comes From, Inc. was founded in 1996 and is headquartered in Castle Rock, Colorado.

How the Company Makes Money

Where Food Comes From generates revenue through a variety of streams, primarily by charging fees for its certification and verification services. These services include audits, assessments, and the issuance of certifications related to sustainability, animal welfare, and food safety. The company also offers software solutions that provide data analytics and management tools to its clients, contributing additional revenue. Significant partnerships with major retailers and food producers enhance its revenue potential, as these companies seek to improve their supply chain transparency and compliance with consumer demands for ethically sourced food. WFCF may also benefit from ongoing trends in the market that emphasize the importance of food provenance and sustainability, positioning it well for future growth.

Where Food Comes From Financial Statement Overview

Summary

Where Food Comes From shows a mixed financial performance. The income statement reflects strong profitability margins despite a significant drop in revenue growth. The balance sheet is stable with moderate leverage and strong return on equity. However, cash flow analysis indicates challenges with declining free cash flow growth. Overall, the company demonstrates financial resilience but faces growth challenges that need addressing.

Income Statement

The income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate by 35.9%, which is concerning. However, the company maintains a solid gross profit margin of approximately 39.95% and a net profit margin of 7.99%. The EBIT and EBITDA margins are also stable at 11.22% and 13.83%, respectively. Despite the revenue decline, profitability metrics remain relatively strong, indicating efficient cost management.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.25, indicating moderate leverage. The return on equity is strong at 27.14%, suggesting effective utilization of equity to generate profits. The equity ratio stands at 61.11%, highlighting a solid equity base relative to total assets. Overall, the balance sheet demonstrates financial stability with manageable debt levels.

Cash Flow

Cash flow analysis reveals challenges with a negative free cash flow growth rate of -16.90% in the TTM period. The operating cash flow to net income ratio is 0.59, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is high at 95.10%, suggesting that most of the net income is converted into free cash flow. While cash flow conversion is strong, the decline in free cash flow growth is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.51M	25.75M	25.14M	24.84M	21.93M	20.08M
Gross Profit	10.14M	10.56M	10.52M	10.47M	9.74M	8.93M
EBITDA	4.49M	3.63M	3.33M	3.53M	4.42M	2.86M
Net Income	2.70M	2.12M	2.15M	1.99M	2.96M	1.39M
Balance Sheet
Total Assets	16.85M	15.31M	16.29M	18.30M	19.78M	19.45M
Cash, Cash Equivalents and Short-Term Investments	4.76M	2.01M	2.64M	4.37M	5.41M	4.37M
Total Debt	2.39M	2.55M	2.80M	3.13M	3.55M	4.60M
Total Liabilities	6.55M	5.37M	5.47M	5.82M	6.04M	6.98M
Stockholders Equity	10.30M	9.93M	10.82M	12.48M	13.75M	12.46M
Cash Flow
Free Cash Flow	2.11M	2.57M	2.67M	2.39M	2.81M	1.99M
Operating Cash Flow	2.26M	2.73M	2.82M	2.65M	3.02M	2.45M
Investing Cash Flow	1.68M	-159.00K	-648.00K	-267.00K	-3.00K	-730.00K
Financing Cash Flow	-1.94M	-3.20M	-3.90M	-3.43M	-1.98M	14.00K

Where Food Comes From Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 13.15 is above the 20-day moving average (MA) of 12.15, above the 50-day MA of 12.62, and above the 200-day MA of 11.59, indicating a bullish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 56.48 is Neutral, neither overbought nor oversold. The STOCH value of 70.72 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
WFCF	60 Neutral	$64.32M	32.23	27.34%	―	-1.17%	43.94%
YXT	50 Neutral	$61.58M	20.02	―	―	―	―
SURG	47 Neutral	$38.51M	-0.83	-313.72%	―	-39.75%	-89.61%
NXTT	44 Neutral	$48.12M	0.03	93.25%	―	259.01%	-61.05%
PHUN	37 Underperform	$40.88M	―	-18.69%	―	―	―

Where Food Comes From Corporate Events

Where Food Comes From, Inc. Earnings Call Highlights Resilience

The latest earnings call from Where Food Comes From, Inc. reflects a resilient performance amidst external challenges. The company showcased strong customer retention, strategic stock buybacks, and a robust cash position. Despite a decline in overall revenue and hardware sales due to industry-specific challenges, the company’s inclusion in a prestigious growth ranking and an increase in net income highlight successful management strategies.

Where Food Comes From, Inc. Reports Strong Q3 Earnings

Where Food Comes From, Inc. is a Colorado-based company specializing in third-party verification of food production practices, primarily serving the agricultural sector by ensuring the authenticity and transparency of food claims. The company provides a range of services, including verification and certification, product sales, and professional consulting, to support the food and agricultural industry.