Education
About Us
Working with TipRanks
Follow Us
Westrock Coffee (WEST)
NASDAQ:WEST
Top Page
Westrock Coffee
(NASDAQ:WEST)
57Neutral
Positive Factors
Cost Management
Green coffee commodity inflation appears to have peaked, with recent pricing showing a decrease from the high levels seen earlier, which could positively impact costs.
Earnings
Westrock Coffee Company reported operating results that beat consensus expectations on both the revenue and AEBITDA lines, driven by strong cross selling activity across multiple product lines.
Partnerships
The company is seeing solid momentum in its single-serve cup and flavor/extracts/ingredients business, which is attracting new partnerships.
Negative Factors
Consumer Confidence
The continuing pullback in consumer confidence is likely to have driven end market demand below initial expectations, leading to lower revenue estimates for 1Q25.
Revenue Challenges
Challenges have been recognized regarding the timing of commercialized product revenues from the Conway facility, influenced by customers' contractual obligations with old suppliers and a choppier consumer environment.
Revenue Estimates
A conservative approach is being taken with a reduced year-over-year revenue growth estimate for 1Q25 due to declining consumer confidence.
Westrock Coffee (WEST) vs. S&P 500 (SPY)
Market Cap
$741.99M
Dividend YieldN/A
Average Volume (3M)302.64K
Price to Earnings (P/E)―
Beta (1Y)0.50
Revenue Growth2.38%
EPS Growth-30.88%
CountryUS
Employees1,408
SectorConsumer Defensive
Sector Strength70
IndustryPackaged Foods
Share Statistics
EPS (TTM)-0.22
Shares Outstanding94,641,174
10 Day Avg. Volume358,710
30 Day Avg. Volume302,640
Financial Highlights & Ratios
PEG Ratio2.44
Price to Book (P/B)1.84
Price to Sales (P/S)0.00
P/FCF Ratio-3.97
Enterprise Value/Market Cap1.57
Enterprise Value/Revenue0.35
Enterprise Value/Gross Profit8.09
Enterprise Value/Ebitda-19.57
Forecast
1Y Price Target
$10.75Price Target Upside37.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Westrock Coffee Business Overview & Revenue Model
Company DescriptionWestrock Coffee Company, LLC roasts, produces, and distributes coffee. It operates through two segments, Beverage Solutions and Sustainable Sourcing and Traceability. The company engages in coffee sourcing, supply chain management, product development, and packaging to the retail, food service and restaurant, convenience store and travel center, non-commercial account, CPG, and hospitality industries. It also offers coffee, tea, juices, flavors, extracts, and ingredients. In addition, the company provides various packaging, including branded and private label coffee in bags, fractional packs, and single serve cups, as well as extract solutions. Further, it engages in delivery and settlement of forward sales contracts for green coffee. The company also exports its products. The company was founded in 2009 and is based in Little Rock, Arkansas.
How the Company Makes MoneyWestrock Coffee generates revenue through its diverse product offerings and comprehensive service model. The company's primary revenue streams come from selling coffee and tea products both under its own brand and as private label products for other companies. They supply to a wide range of sectors including retail, food service, and convenience stores. Additionally, Westrock Coffee leverages its expertise in extracts and flavors to offer custom product solutions, catering to specific client needs. Significant partnerships and long-term contracts with major retailers and foodservice providers also play a crucial role in their earnings, ensuring stable and recurring revenue. The company's commitment to sustainability and quality enhances its brand value, further contributing to its financial success.
Westrock Coffee Financial Statement Overview
Summary
Westrock Coffee faces significant financial challenges. With flat revenue growth and persistent profitability issues evidenced by negative EBIT and net income margins, the company struggles operationally. Its high leverage and diminishing equity highlight financial instability. Negative operating and free cash flows further underline cash generation issues, with a reliance on external financing posing substantial risks.Income Statement
Westrock Coffee's revenue has been relatively flat over the past few years, with negligible growth observed. The company has consistently struggled with profitability, indicated by negative EBIT and net income margins. This suggests operational challenges and an inability to control costs effectively. However, gross profit remains positive, showing some ability to generate revenue beyond the cost of goods sold.55
Neutral
Balance Sheet
Westrock Coffee's balance sheet indicates high leverage with a substantial amount of debt compared to equity, reflected in a concerning debt-to-equity ratio. The equity ratio is low, indicating reliance on debt financing. Although total assets have increased, equity has diminished significantly, pointing to financial instability and potential risks associated with high leverage.45
Neutral
Cash Flow
The company has consistently reported negative operating and free cash flows, indicating cash flow challenges. Free cash flow has been declining, and operating cash flow is negative, which raises concerns about the company's ability to generate cash to fund operations and growth. The financing cash flow is positive, suggesting a reliance on external financing to cover cash deficits.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 850.73M | 864.71M | 867.87M | 698.14M | 550.85M | Gross Profit |
| 153.77M | 139.86M | 152.76M | 145.42M | 107.20M | EBIT |
| -49.12M | -20.43M | 23.93M | 16.95M | -8.99M | EBITDA |
| -7.78M | 14.92M | 4.36M | 48.80M | -97.34M | Net Income Common Stockholders |
| -80.30M | -34.58M | -55.46M | -21.31M | -128.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 26.15M | 37.20M | 16.84M | 19.34M | 16.89M | Total Assets |
| 1.10B | 971.51M | 744.53M | 593.02M | 548.14M | Total Debt |
| 504.99M | 344.96M | 216.91M | 337.81M | 327.71M | Net Debt |
| 478.84M | 307.12M | 200.07M | 318.46M | 310.82M | Total Liabilities |
| 730.45M | 583.56M | 457.86M | 487.15M | 447.22M | Stockholders Equity |
| 371.33M | 387.96M | 9.27M | -239.71M | -201.75M |
| Cash Flow | Free Cash Flow | |||
| -172.87M | -228.85M | -120.06M | -22.56M | -32.92M | Operating Cash Flow |
| -13.24M | -64.06M | -56.63M | 2.88M | -13.45M | Investing Cash Flow |
| -145.92M | -168.35M | -74.17M | -22.65M | -411.82M | Financing Cash Flow |
| 156.63M | 244.21M | 134.68M | 23.84M | 442.58M |
Westrock Coffee Technical Analysis
Positive
7.84
Price Trends
6.44
Positive
6.46
Positive
6.96
Positive
Market Momentum
0.37
Negative
73.29
Negative
87.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEST, the sentiment is Positive. The current price of 7.84 is above the 20-day moving average (MA) of 6.38, above the 50-day MA of 6.44, and above the 200-day MA of 6.96, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 73.29 is Negative, neither overbought nor oversold. The STOCH value of 87.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WEST.
Westrock Coffee Risk Analysis
Westrock Coffee disclosed 33 risk factors in its most recent earnings report. Westrock Coffee reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Westrock Coffee Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $340.86M | 33.77 | 14.73% | ― | 12.84% | -22.88% | |
64 Neutral | $8.77B | 14.65 | 4.78% | 173.88% | 3.25% | 2.28% | |
63 Neutral | $719.04M | 2.57 | -31.74% | ― | -2.45% | 100.59% | |
58 Neutral | $740.52M | ― | -5.95% | ― | 2.44% | 91.41% | |
57 Neutral | $741.99M | ― | -23.58% | ― | 2.38% | -30.88% | |
54 Neutral | $1.18B | 180.14 | 0.43% | ― | -3.37% | -65.26% | |
47 Neutral | $339.94M | ― | -32.48% | 17.12% | -7.06% | -83.82% |
* Consumer Defensive Sector Average
Performance Comparison
WEST
Westrock Coffee
7.84
-2.75
-25.97%
BGS
B&G Foods
4.44
-4.35
-49.49%
HLF
Herbalife
7.06
-3.84
-35.23%
LWAY
Lifeway Foods
22.42
5.52
32.66%
STKL
SunOpta
6.30
0.76
13.72%
THS
TreeHouse Foods
23.31
-12.24
-34.43%
Westrock Coffee Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 27.48%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong growth trajectory driven by significant expansion and development in the company's manufacturing capabilities, particularly with the Conway facilities. Despite the net loss and challenges posed by high coffee prices and tariffs, the company maintains a positive outlook supported by robust sales growth and strategic wins in the single-serve cup market.Q1-2025 Updates
Positive Updates
Revenue and EBITDA Growth
Net sales increased by 11.1% compared to the first quarter of 2024. The combination of Beverage Solutions and SS&T segment EBITDAS reached $11.5 million, up 3.3% over the prior year. Adjusted EBITDA for the first half of 2025 is projected to increase by roughly 25% over the prior year, and for the full year 2025 to be up roughly 35% over 2024.
Conway Facilities Launch
Successful commercial launch of two new manufacturing facilities in Conway, Arkansas, including the largest roast-to-extract-to-RTD facility. The facilities are expected to significantly drive performance, with production capacity for hundreds of millions of RTD cans and billions of single-serve cups annually.
Strong Single-Serve Cup Performance
Significant growth in single-serve cup segment, driven by several private label and branded product wins. The company is expanding capacity in response to high demand.
Sustainable Sourcing Segment Growth
The sustainable sourcing traceability segment saw a 44% increase in sales compared to the first quarter of 2024, with segment adjusted EBITDA increasing from $300,000 to $1.9 million.
Negative Updates
Net Loss
The company reported a net loss of $27.2 million for the first quarter of 2025.
Impact of High Coffee Prices and Tariffs
The company continues to contend with historically high green coffee prices and is expecting the impact of recently announced tariffs on coffee costs to begin in the second quarter, which could pressure liquidity.
Conway Scale-Up Costs
Consolidated adjusted EBITDA was burdened by $3.3 million in Conway scale-up operating costs.
Company Guidance
During Westrock Coffee Company's first quarter 2025 earnings call, the company reaffirmed its guidance for both the first half and the entire year of 2025. The combination of the Beverage Solutions and SS&T segment EBITDAS reached $11.5 million, representing a 3.3% increase from the previous year and aligning with the company's expectations of a flat first quarter. For the first half of 2025, the adjusted EBITDA from these segments is expected to range between $27.5 million and $34 million, marking a 25% year-over-year increase. The full-year 2025 adjusted EBITDA guidance is projected to be between $75 million and $88 million, reflecting a 35% rise over 2024. Key drivers for this performance include the commercial launch of two new manufacturing facilities in Conway, Arkansas, which are anticipated to significantly enhance production capabilities. Additionally, the company highlighted successful customer wins and new capacity expansions across facilities, positioning it to capitalize on evolving consumer trends in the coffee and beverage markets.Westrock Coffee Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Westrock Coffee Expands Board with New Director Appointment
Positive
Nov 7, 2024
Westrock Coffee Company has expanded its board of directors to eleven members, appointing Ken Parent as a Class I director and Vice Chairman. Parent will serve until the 2026 annual meeting, receiving a one-time restricted stock grant valued at $350,000 and an annual equity grant of $260,000. This strategic move enhances governance and aligns with Westrock’s growth plans in the competitive financial market.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.