Goodfood Markets Corp. Reports First Quarter Gross Margin of 35.6%

Goodfood Market Corp Stock Forecast:

According to forecasts from 7 analysts, the average target price for Goodfood Market Corp’s stock over the next 12 months is CAD 0.66. The average analyst rating for the company is “Hold,” indicating a neutral outlook for the stock. However, Stock Target Advisor’s own analysis of the company is “Slightly Bearish,” based on a combination of 3 positive signals and 5 negative signals. At the last closing, the stock was priced at CAD 0.59. In recent times, the stock price has seen significant changes, with an increase of +9.26% in the past week, +13.46% in the past month, but a decrease of -83.47% over the last year.

Goodfood Market Corp. News:

Canadian online meal solutions company Goodfood Market Corp.(FOOD:CA) has released its financial results for Q1 Fiscal 2023, ending December 3, 2022. The company reported net sales of $47 million for the quarter, which is a 39% decrease compared to the same quarter last year. However, they also had a record quarterly gross margin of 35.6%, an improvement of 11.6% compared to the same period last year. Excluding inventory write-offs related to discontinuing Goodfood On-Demand, the adjusted gross margin came in at 36.9%.

The net loss for the quarter was $12 million, including $2 million of non-recurring charges, which is an improvement of $10 million compared to $22 million in the same period in 2022.

The company also had an adjusted EBITDA loss of $2 million for the quarter, which is an 85% improvement compared to a loss of $15 million in the same quarter of the prior year. Cash used in operating activities for the quarter was $6 million, including $2 million cash impact of reorganization and related costs, compared to cash used of $19 million for the same period last year.

The company is reaffirming its expectation of positive adjusted EBITDA in the second quarter of Fiscal 2023, on the back of expected continued strength in gross margin and further reductions in selling, general and administrative expenses.

Positive Fundamentals:

Goodfood Markets Corp. stock appears to be undervalued when compared to its book value, as it is trading low compared to its peers on a price to book value basis. This may indicate that the stock is underpriced, but it is important to also consider the company’s overall financial performance to ensure there are no underlying issues.

The stock has shown superior revenue growth in the previous five years compared to its sector, which is a positive indicator for the company’s financial health.

It has high Gross Profit to Asset Ratio, which is a popular measure among value investors that suggests the company may generate superior returns in the long run.

Negative Fundamentals:

This stock has several potential drawbacks that investors should be aware of. One key issue is its low market capitalization, which may make it less stable in the long run, as it is one of the smaller entities in its sector.

It has also shown high volatility and above-median total returns for its sector over the past 5 years, which may be a red flag for investors who are not comfortable with taking on high levels of risk.

The company has had negative total cash flow and negative total free cash flow in the most recent four quarters, which could be a sign of financial trouble.

Additionally, the stock has shown below-median earnings growth in the previous 5 years compared to its sector, which could be a concern for investors looking for stocks with strong growth potential.

Overall, while Goodfood Markets Corp. stock may have some attractive features, investors should weigh these potential drawbacks carefully before deciding to invest.

About Goodfood Market Corp.:

Goodfood Market Corp. is an online grocery delivery service that provides customers in Canada with fresh, high-quality meals and grocery items. The company offers a wide range of products, including ready-to-eat and ready-to-cook options, to make meal planning and preparation convenient for customers. The product selection includes a variety of bakery items, desserts, meat and seafood, drinks, pantry staples, fresh produce, snacks, dairy products, frozen foods, and kitchen essentials. Goodfood Market Corp. is based in Montréal, Canada and is dedicated to making it easy for customers to access a wide variety of fresh, healthy, and delicious food options. The company is committed to providing the highest level of customer service and delivering products that meet the highest standards of quality and freshness.

 

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