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Where Food Comes From (WFCF)
NASDAQ:WFCF
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Where Food Comes From
(NASDAQ:WFCF)
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Rating:62Neutral
Price Target:
$13.50
▲(21.08% Upside)
Action:ReiteratedDate:03/01/26
The score is held back primarily by softening financial performance (stalled/slightly negative revenue growth, compressed margins, and weaker cash-flow conversion) and a demanding valuation (high P/E with no dividend support). These are partly offset by a healthy, low-leverage balance sheet, constructive technical trend signals, and an earnings-call outlook that highlights diversification initiatives and continued capital returns despite near-term industry headwinds.
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 (WFCF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$58.66M
Dividend YieldN/A
Average Volume (3M)3.42K
Price to Earnings (P/E)38.5
Beta (1Y)0.02
Revenue Growth-1.17%
EPS Growth43.94%
CountryUS
Employees93
SectorIndustrials
Sector Strength72
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.04
Shares Outstanding5,048,251
10 Day Avg. Volume1,853
30 Day Avg. Volume3,425
Financial Highlights & Ratios
PEG Ratio-1.54
Price to Book (P/B)6.36
Price to Sales (P/S)2.38
P/FCF Ratio40.77
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue2.32
Enterprise Value/Gross Profit6.06
Enterprise Value/Ebitda20.00
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Where Food Comes From Business Overview & Revenue Model
Company DescriptionWhere 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 MoneyWhere 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 Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Neutral
The call reflects a balanced tone: the company is profitable and actively diversifying its revenue base with meaningful product launches (RaiseWell) and strategic partnerships (Whole Foods, Pangea), and it is returning capital to shareholders via buybacks. However, significant industry headwinds in the beef market — a 70-year low in U.S. cattle supply, tariffs, record beef prices and a material packing-plant closure that hit Q4 revenue — have pressured beef-related verification sales and created near-term uncertainty. Management’s corrective actions (returning bonuses, expense reduction, continued diversification and ADT positioning) mitigate some concerns but do not eliminate short-term risks to the beef segment.Q4-2025 Updates
Positive Updates
Full Year Financial Results
Total revenue of $24.9 million and net income of $1.5 million, or $0.30 per share for fiscal 2025, demonstrating profitability despite industry headwinds.
Share Repurchases and Capital Return
Repurchased 183,016 shares in 2025; total repurchases and private purchases since program inception are 1,374,652 shares, representing $15.2 million returned to shareholders. Management expects to continue repurchasing stock in 2026.
Non-Beef Revenue Growth and Diversification
Verification activity for pork, dairy and egg operations increased year-over-year. Certification activity for organic, non-GMO, gluten-free and upcycled claims also showed gains, reducing reliance on beef-related revenue streams.
Launch of RaiseWell Certified
Introduced RaiseWell Certified — a new animal care and traceability standard covering natural raising practices, no antibiotics/added hormones, and source-of-origin verification, with staged rollout beginning with beef and planned expansion to poultry, eggs, dairy and pork.
Major Retail Endorsement for RaiseWell
Whole Foods Market became the first major retailer to adopt the RaiseWell program, providing an important endorsement likely to drive further retailer adoption.
CARE Certified Leather Traceability Collaboration
Announced a collaboration with Pangea (with Walmart and Prime Pursuits) to introduce CARE Certified sustainable leather to U.S. automotive brands through the 'Transparency in Motion' program, enabling advanced traceability and potentially new revenue channels for ranchers.
Leadership in Animal Disease Traceability (ADT)
IMI Global serves as administrator for U.S. CattleTrace and is positioned as an experienced provider for national ADT solutions, engaging with industry and government to advance traceability — a potential long-term strategic growth area.
Proactive Management Actions to Protect Financials
Executive management returned discretionary bonuses after an unexpected packing-plant closure impacted revenue and bonus metrics; the returned bonus compensation will reduce selling, general and administrative expense and benefit the first quarter 10-Q.
Negative Updates
Beef-Related Revenue Pressure from Herd Contraction
U.S. cattle supply is at a 70-year low, driven by drought and rising production costs, leading many ranchers to reduce investment in verifications and tags and causing pressure on beef-related verification revenue.
Q4 Revenue Hit by Packing Plant Closure
An unexpected closure of a key packing plant materially impacted fourth-quarter revenue and prior internal projections, reducing revenues tied to NHTC Natural and EU export certification programs.
Tariffs and High Beef Prices Dampening Activity
Tariffs and record-high beef prices have discouraged some ranchers from purchasing verifications, contributing to declines in beef verification and tag sales.
Near-Term Financial Uncertainty for Beef Segment
While management expects herd rebuilding over the next couple of years, the timing and pace of recovery are uncertain, leaving near-term beef segment performance exposed to industry cyclicality.
Operational Impact on Compensation and Forecasting
The packing plant closure altered internal projections used to determine discretionary bonuses; executives returned bonuses, indicating both prudent governance and an operational setback that affected management incentives and forecasting accuracy.
Company Guidance
Management's guidance balanced near-term caution with multi-year optimism: they reported 2025 revenue of $24.9 million and net income of $1.5 million ($0.30 per share) but warned that beef-related verification and tag sales remain pressured by a U.S. cattle supply at a 70‑year low and a Q4 hit from an unexpected packing-plant closure; executives returned discretionary bonuses, which will reduce SG&A compensation expense and benefit the Q1 10‑Q income statement. They said the herd contraction appears near a bottom with industry rebuilding expected over the next couple of years and anticipated accelerated growth as recovery gains momentum, plan to continue share repurchases in 2026 after buying 183,016 shares in 2025 (1,374,652 total repurchased/private purchases to date, returning $15.2 million to shareholders), and will expand non‑beef services and staged rollouts of RaiseWell (beef, then poultry, eggs, dairy, pork) alongside ADT traceability initiatives.Where Food Comes From Financial Statement Overview
Summary
Fundamentals are mixed. Revenue has stalled and turned slightly negative in 2025 (-2.43% YoY) and profitability has weakened with meaningful multi-year margin compression (gross ~44% to ~38%; net ~13.5% to ~6.2%). The balance sheet is a strength with low and improving leverage (debt down to $1.4M; ~0.15 debt-to-equity), but cash-flow quality is a concern as 2025 operating cash flow fell and covered only about half of net income, reducing confidence in earnings conversion.Income Statement
Revenue has been relatively stable over the last several years, but growth has slowed and turned slightly negative in 2025 (-2.43% YoY). Profitability remains positive, though margins have compressed meaningfully from 2021 to 2025 (gross margin down from ~44% to ~38%; net margin down from ~13.5% to ~6.2%), indicating weaker operating leverage and/or higher cost pressure. Net income is still solid in 2025 ($1.5M), but the multi-year trend shows declining margins versus prior peaks.63
Positive
Balance Sheet
Leverage is modest and improving: total debt fell from $4.6M (2020) to $1.4M (2025), and debt-to-equity is low at ~0.15 in 2025, which supports financial flexibility. Equity has declined from 2021–2025, but remains sizable ($9.3M) relative to debt, and returns on equity are healthy (mid-teens in 2025). Overall balance sheet risk looks contained, with the main drawback being the reduction in the asset/equity base over time.72
Positive
Cash Flow
Cash generation remains positive, with 2025 operating cash flow of $1.6M and free cash flow of $1.45M. However, cash flow weakened in 2025 versus 2024, with free cash flow down ~31% and operating cash flow covering only about half of net income (down sharply from prior years), suggesting less favorable working-capital timing and/or lower cash conversion. Free cash flow still roughly tracks earnings (about 0.90x net income in 2025), but the recent deterioration reduces quality-of-earnings confidence.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 24.89M | 25.75M | 25.14M | 24.84M | 21.93M |
| Gross Profit | 9.51M | 10.56M | 10.52M | 10.47M | 9.74M |
| EBITDA | 2.88M | 3.63M | 3.33M | 3.53M | 4.42M |
| Net Income | 1.54M | 2.12M | 2.15M | 1.99M | 2.96M |
Balance Sheet | |||||
| Total Assets | 12.90M | 15.31M | 16.29M | 18.30M | 19.78M |
| Cash, Cash Equivalents and Short-Term Investments | 3.20M | 2.01M | 2.64M | 4.37M | 5.41M |
| Total Debt | 1.44M | 2.55M | 2.80M | 3.13M | 3.55M |
| Total Liabilities | 3.59M | 5.37M | 5.47M | 5.82M | 6.04M |
| Stockholders Equity | 9.30M | 9.93M | 10.82M | 12.48M | 13.75M |
Cash Flow | |||||
| Free Cash Flow | 1.45M | 2.57M | 2.67M | 2.39M | 2.81M |
| Operating Cash Flow | 1.61M | 2.73M | 2.82M | 2.65M | 3.02M |
| Investing Cash Flow | 1.68M | -159.00K | -648.00K | -267.00K | -3.00K |
| Financing Cash Flow | -2.10M | -3.20M | -3.90M | -3.43M | -1.98M |
Where Food Comes From Technical Analysis
Negative
11.15
Price Trends
11.63
Negative
11.89
Negative
11.80
Negative
Market Momentum
0.08
Positive
43.39
Neutral
60.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WFCF, the sentiment is Negative. The current price of 11.15 is below the 20-day moving average (MA) of 12.11, below the 50-day MA of 11.63, and below the 200-day MA of 11.80, indicating a bearish trend. The MACD of 0.08 indicates Positive momentum. The RSI at 43.39 is Neutral, neither overbought nor oversold. The STOCH value of 60.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $58.66M | 38.54 | 15.69% | ― | -1.17% | 43.94% | |
49 Neutral | $36.11M | -2.82 | -89.60% | ― | ― | ― | |
44 Neutral | $20.15M | -1.86 | -994.64% | ― | -39.75% | -89.61% | |
44 Neutral | $10.69M | -0.91 | 74.86% | ― | 259.01% | -61.05% | |
43 Neutral | $35.13M | -5.76 | -11.63% | ― | ― | ― |
* Industrials Sector Average
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Where Food Comes From
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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.