Cannabis stocks might not be getting that much attention right now, as investors seem to be focusing on more exciting markets, such as crypto. However, one stock that made a lot of noise recently was a small cannabis producer called Village Farms International (NASDAQ: VFF). This promising little pot stock, which was known as one of the few producers to be consistently profitable, ended up crashing on Monday after reporting worse-than-expected financial results. Here’s what happened and what to expect going forward.
While the results weren’t as stellar as many hoped, they weren’t necessarily bad either. Village Farms reported that sales were up substantially from the $32.1 million reported in Q1 2020 to the $52.4 million reported in Q1 2021. While this was a 63% increase, what really disappointed investors was that the company reported a pretty big loss this quarter.
Village Farms saw a $7.4 million net loss, compared to the $4.2 net gain it reported around a year ago. Even besides this net loss, Village has missed five of its last eight profit targets, a trend that’s getting a bit worrisome for some investors. However, most of those quarters have still been at least somewhat profitable for the cannabis company.
“We are confident that our unparalleled large-scale, low-cost cultivation capabilities, alongside one of the largest high-tech greenhouse footprints in the country, will provide a meaningful advantage to capitalize on this significant opportunity,” said CEO Michael DeGiglio in an official statement. “In tandem, internationally, we continue to pursue targeted, strategic opportunities for the long-term that, again, meet our thresholds for return on investment.”
While not the biggest cannabis company, Village Farms International has cultivated a pretty strong following among pot stock enthusiasts. It has a unique history, starting off first as a vegetable producer before slowly transitioning into the world of cannabis. Whether its for this reason for another, Village Farms has been one of the few producers to consistently report a profit, whereas most other cannabis companies were reporting losses.
Shares of Village Farms International are down around 24.7% right now following the news. Over the past year or so, Village Farms has seen its stock steadily rise from around $4 to as much as $20 per share. Right now, its back down to $8.30. Most analysts are still optimistic about the company, despite reporting these less-than-stellar results. Many other pot stocks have reported much worse figures, so it’s nothing new. If anything, value investors in the cannabis industry might look at Village Farms and see a potential value pick. However, growth investors might not be happy with Village Farm’s modest growth rates given its size.
Village Farms International Company Profile
Village Farms International Inc, along with its subsidiaries, owns and operates agricultural greenhouse facilities. It produces, markets, and sells tomatoes, bell peppers, and cucumbers. It also produces power. The company operates its business through segments that are Cannabis, Produce and Energy. The Produce Business segment generates maximum revenue for the company. The Cannabis segment produces and supplies cannabis products to be sold to other licensed providers and provincial governments across Canada and internationally. – Warrior Trading News
