Village Farms “is positioned higher than ever”, this analyst says

Doug Cooper of Beacon Securities raised his worth goal on Village Farms Worldwide (Village Farms Worldwide Inventory Quote, Chart, Information, Analysts, Financials NASDAQ:VFF) to US$5.50 from US$5.00 whereas sustaining a “Purchase” score after what he described as a “transformational” yr for the corporate.

In a March 12 report, Cooper stated Village Farms delivered a file 2025, with sturdy enhancements throughout income, profitability and its steadiness sheet.

Village Farms reported This fall income of US$49.6-million and financial 2025 income of US$216-million. Adjusted EBITDA was US$8.6-million within the fourth quarter and US$50-million for the complete yr, whereas earnings per share got here in at US$0.02 for This fall and US$0.19 for fiscal 2025.

Worldwide hashish income totalled C$12.1-million within the fourth quarter and C$52.7-million for the yr, in contrast with C$8.5-million in 2024. Income from the Netherlands hashish market reached US$3.3-million in This fall and US$9.9-million for the yr, versus zero the prior yr.

Cooper famous that the corporate’s Canadian hashish section, together with worldwide operations, generated gross margins of 43% and EBITDA margins of 27%, whereas its Netherlands hashish enterprise produced a 33.5% EBITDA margin throughout its first three quarters of contribution.

Village Farms ended the quarter with US$87-million in money, internet money of US$53-million, and US$96-million in working capital, giving it one of many strongest steadiness sheets within the sector.

“On the again of its transformational yr, we imagine VFF is positioned higher than ever to construct upon its FY25 success,” Cooper stated.

The analyst stated the corporate advantages from a low-cost manufacturing mannequin, high-quality product positioning and vital capability enlargement alternatives. Conversion of the corporate’s Delta 2 facility is anticipated to extend Canadian hashish capability by roughly 30%, whereas enlargement of its Netherlands facility might improve manufacturing five-fold to 10 tonnes.

“This may transfer the corporate from its present ‘offered out’ place to being able to proceed to achieve share each in Canada and internationally,” Cooper stated.

He added that broader trade developments additionally seem supportive. In Canada, fewer rivals and lowered manufacturing capability have helped stabilize pricing, whereas the Netherlands’ legalization program continues to broaden and Germany’s medical hashish market is projected to develop from €2-billion right this moment to greater than €4.5-billion by 2028.

Primarily based on its present enlargement plans, Cooper believes Village Farms might ultimately add roughly US$100-million in incremental income and greater than US$30-million in EBITDA, implying a possible run-rate of over US$300-million in income and about US$80-million in EBITDA by late fiscal 2027 or 2028.

Beacon now forecasts fiscal 2026 income of US$259.0-million and Adjusted EBITDA of US$59.7-million, enhancing to US$289.1-million in income and US$67.8-million in Adjusted EBITDA in fiscal 2027.

Disclosure: The household of Nick Waddell owns shares of Village Farms

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