Healthy Choice Wellness Corp. (NYSE: HCWC)

Sector: Consumer Defensive Industry: Packaged Foods CIK: 0001948864
Market Cap 3.06 Mn
P/B 0.52
P/E -1.08
P/S 0.04
ROIC (Qtr) -5.13
Div Yield % 0.00
Rev 1y % (Qtr) 4.45
Total Debt (Qtr) 19.97 Mn
Debt/Equity (Qtr) 3.38
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About

Investment thesis

Bull case

  • Tangible assets of 26.97M provide exceptional 689.90x coverage of deferred revenue 39089, showing strong service capability backing.
  • Robust free cash flow of 2.40M exceeds capital expenditure of 354680 by 6.76x, indicating strong organic growth funding capability.
  • Operating cash flow of 2.75M provides strong 70.37x coverage of deferred revenue 39089, indicating service delivery capability.
  • Tangible assets of 26.97M provide robust 689.90x coverage of other current liabilities 39089, indicating strong asset backing.
  • Strong cash position of 3M provides 76.76x coverage of other current liabilities 39089, indicating excellent liquidity.

Bear case

  • Operating cash flow of 2.75M barely covers its investment activities of (354680), with a coverage ratio of -7.76, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating earnings of (1.79M) show weak coverage of depreciation charges of 5.43M, with a -0.33 ratio indicating high capital intensity and potential reinvestment needs.
  • High financing cash flow of (1.18M) relative to working capital of (291357), which is 4.06x suggests concerning dependence on external funding for operational needs.
  • Free cash flow of 2.40M represents just -2.30x of debt issuance (1.04M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 5.43M relative to operating cash flow of 2.75M, which is 1.97x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Packaged Foods
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KHC Kraft Heinz Co 28.20 Bn -4.82 1.13 21.22 Bn
2 GIS General Mills Inc 26.99 Bn 20.72 1.54 13.73 Bn
3 JBS Jbs N.V. 17.81 Bn 10.08 0.23 23.92 Bn
4 MKC Mccormick & Co Inc 16.10 Bn 44.21 3.77 4.00 Bn
5 HRL Hormel Foods Corp /De/ 12.37 Bn 18.03 1.34 2.86 Bn
6 SJM J M SMUCKER Co 11.08 Bn 19.60 1.97 7.91 Bn
7 PPC Pilgrims Pride Corp 10.32 Bn 9.54 0.56 3.29 Bn
8 MICC Magnum Ice Cream Co N.V. 9.71 Bn 28.17 1.04 4.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.61 1.47
EV to Cash from Ops. EV/CFO 7.45 29.75
EV to Debt EV to Debt 1.03 27.85
EV to EBIT EV/EBIT -11.47 86.88
EV to EBITDA EV/EBITDA 5.06 -156.20
EV to Free Cash Flow [EV/FCF] EV/FCF 8.56 -5.67
EV to Market Cap EV to Market Cap 6.70 1.15
EV to Revenue EV/Rev 0.26 7.32
Price to Book Value [P/B] P/B 0.52 8.48
Price to Earnings [P/E] P/E -1.08 14.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 4.58
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.76
Dividend per Basic Share Div per Share (Qtr) 0.00 0.65
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 22.76
Interest Coverage Int. cover (Qtr) -1.72 6.64
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -159.39 -118.07
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 67.93 43.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.66
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 83.37 -48.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 193.44 -152.35
EBIT Growth (1y) % EBIT 1y % (Qtr) 83.37 -50.79
EBT Growth (1y) % EBT 1y % (Qtr) 75.31 -54.94
EPS Growth (1y) % EPS 1y % (Qtr) 80.80 -28.10
FCF Growth (1y) % FCF 1y % (Qtr) 172.21 7.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 27.52 439.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.35 1.01
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.12
Cash Ratio Cash Ratio (Qtr) 0.22 0.86
Current Ratio Curr Ratio (Qtr) 0.98 2.60
Debt to Equity Ratio Debt/Equity (Qtr) 3.38 2.21
Interest Cover Ratio Int Coverage (Qtr) -1.72 6.64
Times Interest Earned Times Interest Earned (Qtr) -1.72 6.64
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 4.60 -919.13
EBIT Margin % EBIT Margin % (Qtr) -2.26 -1,474.87
EBT Margin % EBT Margin % (Qtr) -3.57 -1,537.76
Gross Margin % Gross Margin % (Qtr) 39.70 26.98
Net Profit Margin % Net Margin % (Qtr) -3.60 -1,538.60