Village Farms International, Inc. (NASDAQ: VFF)

Sector: Consumer Defensive Industry: Farm Products CIK: 0001584549
Market Cap 343.18 Mn
P/B 1.16
P/E 16.05
P/S 1.20
ROIC (Qtr) 1.21
Div Yield % 0.00
Rev 1y % (Qtr) 21.48
Total Debt (Qtr) 39.19 Mn
Debt/Equity (Qtr) 0.13
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About

Village Farms International, Inc. (VFF) is a company that operates in the agricultural and cannabis industries. With a mission to improve life's journey for the wellbeing of humankind and the earth, the company has been building a family of brands that encompass this mission. The company's core values include integrity, fairness, quality, inclusion, sustainability, and hard work, as well as an unwavering desire to do what's right. Village Farms International's main business activities revolve around the agricultural and cannabis industries. The...

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Investment thesis

Bull case

  • Strong operating cash flow of 41.26M provides robust 1.05x coverage of total debt 39.19M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 87.56M provide 14.65x coverage of short-term debt 5.97M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 350.93M provides 8.96x coverage of total debt 39.19M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 41.26M provides exceptional 14.10x coverage of interest expenses 2.92M, showing strong debt service capability.
  • Operating cash flow of 41.26M provides strong 26.57x coverage of stock compensation 1.55M, indicating sustainable incentive practices.

Bear case

  • Operating earnings of 30.17M show weak coverage of depreciation charges of 18.44M, with a 1.64 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 18.44M relative to operating cash flow of 41.26M, which is 0.45x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 32.13M represents just -4.01x of debt issuance (8.02M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 41.26M shows concerning coverage of minority interest expenses of (374000), which is -110.31x, suggesting complex corporate structure risks.
  • Tax assets of 719000 provide limited offset against tax liabilities of 40.46M, which is 0.02x, indicating potential future cash flow pressure from tax obligations.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Farm Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ADM Archer-Daniels-Midland Co 33.15 Bn 30.75 0.41 9.76 Bn
2 TSN Tyson Foods, Inc. 21.32 Bn 106.61 0.39 8.36 Bn
3 BG Bunge Global SA 15.29 Bn 238.98 0.33 17.78 Bn
4 CALM Cal-Maine Foods Inc 3.98 Bn 1,160.43 2.88 0.00 Bn
5 FDP Fresh Del Monte Produce Inc 2.34 Bn 23.44 0.67 0.34 Bn
6 DOLE Dole plc 1.56 Bn 105.27 0.17 1.33 Bn
7 VITL Vital Farms, Inc. 1.26 Bn 20.76 1.77 0.06 Bn
8 AGRO Adecoagro S.A. 0.87 Bn 37.23 0.63 1.61 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.77 0.83
EV to Cash from Ops. EV/CFO 7.81 2.92
EV to Debt EV to Debt 8.22 3.55
EV to EBIT EV/EBIT 10.67 0.40
EV to EBITDA EV/EBITDA 13.25 -24.51
EV to Free Cash Flow [EV/FCF] EV/FCF 10.02 1.40
EV to Market Cap EV to Market Cap 0.94 3.04
EV to Revenue EV/Rev 1.13 0.77
Price to Book Value [P/B] P/B 1.16 0.54
Price to Earnings [P/E] P/E 16.05 89.91
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -21.77
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 42.88
Dividend per Basic Share Div per Share (Qtr) 0.00 0.97
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.76
Interest Coverage Int. cover (Qtr) 10.32 -31.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -17.56 -1,577.17
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 205.13 86.77
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 11.26
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 148.82 -87.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 239.41 -202.55
EBIT Growth (1y) % EBIT 1y % (Qtr) 173.11 -99.71
EBT Growth (1y) % EBT 1y % (Qtr) 160.76 -133.79
EPS Growth (1y) % EPS 1y % (Qtr) 141.67 -151.42
FCF Growth (1y) % FCF 1y % (Qtr) 4,589.93 135.44
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 34.87 -28.83
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 1.37
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.12
Cash Ratio Cash Ratio (Qtr) 1.55 0.98
Current Ratio Curr Ratio (Qtr) 2.78 2.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.13 -1.90
Interest Cover Ratio Int Coverage (Qtr) 10.32 -31.98
Times Interest Earned Times Interest Earned (Qtr) 10.32 -31.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.00 691.86
EBIT Margin % EBIT Margin % (Qtr) 10.54 650.76
EBT Margin % EBT Margin % (Qtr) 9.52 644.45
Gross Margin % Gross Margin % (Qtr) 25.30 -69.17
Net Profit Margin % Net Margin % (Qtr) 7.50 644.34