Hey there. So, went to run a screen on SunOpta and it actually scores very, very poor on our screener. Primarily because it is unprofitable, has very little earnings and revenue growth history and it has no earnings and revenue estimates for next year.
So, the bulk of the report would be difficult to produce, and wouldn't be of much value. However, I'd happily speak on SOY as a company.
It's an interesting space, and one that I think millennials will gravitate to, not only due to the environment attitude of it, but also simply due to the plant based movement.
The company is also only trading at around 1.4 times 2021 estimated sales. Company has a solid balance sheet as well.
It's share price has been soaring in 2020 primarily due to its increased efficiency and more investors getting eyes on this stock due a movement to plant based food. We can see the company has more than doubled EBITDA, coming in at $22.8 million in the third quarter of 2020 vs $9.9 million in the third quarter of 2019.
The thing that concerns me is the overall lack of top line growth. Expanding margins and efficiency are great for a turnaround project. But eventually in order to continue to increase overall growth, you're going to need to see that top line grow.
The company just released a few hours ago that production facilities coming online in Q4 will bring on $100 million in revenue growth by the end of 2022. In the grand scheme of things, this adds single digit revenue growth to current numbers. Not world beating, but its a step in the right direction.
I think this is a company that has run up in price significantly due to it executing a turnaround effort very well. But as I mentioned, You can only post huge increased in EBITDA for so long, until the revenue needs to be there as well.
One to keep on the watch list.