Laird Superfood, Inc. (LSF) Bundle
Understanding Laird Superfood, Inc. (LSF) Revenue Streams
Understanding Laird Superfood, Inc.’s Revenue Streams
The primary revenue sources for the company are categorized into two main channels: e-commerce and wholesale.
Breakdown of Primary Revenue Sources
| Revenue Source | Q3 2024 ($) | Q3 2023 ($) | YTD 2024 ($) | YTD 2023 ($) |
|---|---|---|---|---|
| E-commerce | 6,887,356 | 4,842,389 | 18,854,020 | 13,409,443 |
| Wholesale | 4,888,990 | 4,337,392 | 12,834,918 | 11,607,367 |
| Total Net Sales | 11,776,346 | 9,179,781 | 31,688,938 | 25,016,810 |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, net sales increased by 27% compared to the same period in 2023. The growth was primarily driven by a 41% increase in e-commerce sales, while wholesale sales grew by 11%.
Contribution of Different Business Segments to Overall Revenue
In Q3 2024, the e-commerce channel accounted for 58% of total net sales, while the wholesale channel contributed 42%. In the nine months ended September 30, 2024, e-commerce represented 59% of total net sales compared to 54% in the same period of 2023.
Analysis of Significant Changes in Revenue Streams
The significant changes in revenue streams include:
- Amazon.com sales increased by 133% in Q3 2024 compared to Q3 2023.
- Direct-to-Consumer (DTC) sales increased by 10% in Q3 2024 compared to Q3 2023.
- The wholesale channel saw a 13% increase in Q3 2024 compared to Q3 2023.
Overall, the company's transition to a variable cost third-party co-manufacturing business model has allowed it to achieve higher gross margins, improving from 26.4% in YTD 2023 to 41.7% in YTD 2024.
Revenue Composition by Product Category
| Product Category | Q3 2024 ($) | Q3 2023 ($) | YTD 2024 ($) | YTD 2023 ($) |
|---|---|---|---|---|
| Coffee Creamers | 6,273,157 | 5,804,273 | 16,540,456 | 15,583,969 |
| Coffee, Tea, and Hot Chocolate | 3,298,363 | 1,981,731 | 7,977,157 | 5,894,632 |
| Hydration and Beverage Enhancers | 2,520,402 | 1,726,512 | 6,855,274 | 3,395,671 |
| Harvest Snacks and Other Food Items | 1,558,611 | 1,747,908 | 4,546,448 | 5,350,252 |
These figures indicate a strong performance in the company's core product lines, particularly in coffee creamers and hydration products, which are driving overall revenue growth.
A Deep Dive into Laird Superfood, Inc. (LSF) Profitability
A Deep Dive into Laird Superfood, Inc. Profitability
Gross Profit Margin:
| Period | Gross Profit | Cost of Goods Sold (COGS) | Gross Margin |
|---|---|---|---|
| Q3 2024 | $5,064,132 | $6,712,214 | 43.0% |
| Q3 2023 | $2,847,157 | $6,332,624 | 31.0% |
| YTD 2024 | $13,205,514 | $18,483,424 | 41.7% |
| YTD 2023 | $6,597,101 | $18,419,709 | 26.4% |
Operating Profit Margin:
| Period | Operating Loss | Total Operating Expenses | Operating Margin |
|---|---|---|---|
| Q3 2024 | ($268,590) | $5,332,722 | -2.3% |
| Q3 2023 | ($2,787,069) | $5,634,226 | -30.4% |
| YTD 2024 | ($1,695,773) | $14,901,287 | -5.3% |
| YTD 2023 | ($10,745,156) | $17,342,257 | -61.9% |
Net Profit Margin:
| Period | Net Loss | Net Sales | Net Margin |
|---|---|---|---|
| Q3 2024 | ($166,120) | $11,776,346 | -1.4% |
| Q3 2023 | ($2,654,884) | $9,179,781 | -28.9% |
| YTD 2024 | ($1,421,718) | $31,688,938 | -4.5% |
| YTD 2023 | ($10,306,040) | $25,016,810 | -41.2% |
Trends in Profitability:
- Gross profit increased by 78% from Q3 2023 to Q3 2024.
- Gross margin improved significantly from 31.0% to 43.0% in Q3 2024.
- Operating loss decreased by 90% from Q3 2023 to Q3 2024.
- Net loss reduced by 94% in Q3 2024 compared to Q3 2023.
Comparison with Industry Averages:
- Industry average gross margin for food companies is approximately 30-35%, indicating strong performance.
- Net margin for similar companies typically ranges from -5% to 10%, showcasing the company is trending towards improved efficiency.
Operational Efficiency Analysis:
- General and administrative expenses decreased by 14% year-over-year.
- Sales and marketing expenses also reduced by 14%, indicating better cost management.
- Total operating expenses decreased by 14% from 2023 to 2024.
Debt vs. Equity: How Laird Superfood, Inc. (LSF) Finances Its Growth
Debt vs. Equity: How Laird Superfood, Inc. Finances Its Growth
The company has adopted a financing strategy that incorporates both debt and equity to support its growth trajectory. As of September 30, 2024, the company reported total liabilities of $5,698,141, which includes current liabilities of $5,536,517 and non-current liabilities of $161,624.
Overview of the Company's Debt Levels
As of September 30, 2024, the company holds a total long-term debt of $161,624. The short-term debt, primarily consisting of accounts payable and accrued expenses, stands at $5,536,517.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for the company is calculated as follows:
| Total Liabilities | Total Equity | Debt-to-Equity Ratio |
|---|---|---|
| $5,698,141 | $13,052,104 | 0.44 |
This ratio of 0.44 indicates a relatively moderate level of debt compared to equity, which is below the industry average of approximately 0.75.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
There have been no recent significant debt issuances reported in the latest financial statements. The company primarily relies on equity financing, with a total paid-in capital of $120,761,700 as of September 30, 2024. The current credit rating has not been specified, but the company has maintained a conservative approach to leverage.
Balancing Between Debt Financing and Equity Funding
The company has historically financed its operations through private placements of common stock, an initial public offering (IPO), and term loans. As of September 30, 2024, the total stockholders' equity stands at $13,052,104. The management continues to seek opportunities to optimize capital structure by balancing debt and equity to reduce the cost of capital while funding growth initiatives.
Assessing Laird Superfood, Inc. (LSF) Liquidity
Assessing Laird Superfood's Liquidity
Current and Quick Ratios
As of September 30, 2024, the current ratio for Laird Superfood was calculated at 1.57, indicating a healthy liquidity position for the company. The quick ratio, which excludes inventory from current assets, stood at 0.87, suggesting that while the company has adequate current assets to cover its current liabilities, it may face challenges in covering liabilities without relying on inventory sales.
Analysis of Working Capital Trends
As of September 30, 2024, the total net working capital was $11.8 million, a slight decrease from $12.0 million as of December 31, 2023. The working capital trend shows a consistent management of short-term assets and liabilities, with the company maintaining a positive working capital position despite fluctuations in sales and operating expenses.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, indicated the following trends:
| Cash Flow Type | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Cash flows from operating activities | $526,258 | $(10,929,145) |
| Cash flows from investing activities | $(19,178) | $567,459 |
| Cash flows from financing activities | $(12,495) | $(23,066) |
| Net change in cash and cash equivalents | $494,585 | $(10,384,752) |
Cash flows from operating activities improved significantly in 2024, reflecting better margins and reduced selling, general, and administrative expenses. The positive cash flow stands in stark contrast to the substantial outflow experienced in the previous year.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company had $8.2 million in cash on hand, compared to $7.7 million as of December 31, 2023. Additionally, the company had access to $1.2 million in advances under a Factoring Agreement, which remained untapped. While the liquidity position shows improvement, the quick ratio indicates potential challenges in meeting immediate liabilities without liquidating inventory. The accumulated deficit of $107.7 million raises concerns about long-term sustainability unless operational efficiency continues to improve.
Is Laird Superfood, Inc. (LSF) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the company's stock valuation can be assessed using key financial ratios:
- Price-to-Earnings (P/E) Ratio: The P/E ratio is calculated using the net loss per share, which was ($0.14) for the nine months ended September 30, 2024, resulting in a negative P/E ratio.
- Price-to-Book (P/B) Ratio: The book value per share is calculated as total stockholders' equity of $13,052,104 divided by shares outstanding of 10,270,662, yielding a P/B ratio of 1.27.
- Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EBITDA for the nine months ended September 30, 2024, was $1,073,698, and the enterprise value, calculated as market capitalization plus total debt minus cash, is approximately $18 million, resulting in an EV/EBITDA ratio of approximately 16.73.
Stock price trends over the last 12 months indicate significant volatility. The stock price started the year at approximately $2.50 and peaked at $4.25 before settling around $3.00 as of the end of September 2024.
| Metric | Value |
|---|---|
| P/E Ratio | N/A (negative earnings) |
| P/B Ratio | 1.27 |
| EV/EBITDA Ratio | 16.73 |
| Stock Price (Start of Year) | $2.50 |
| Stock Price (Peak) | $4.25 |
| Stock Price (End of September 2024) | $3.00 |
Regarding dividends, the company currently does not pay any dividends, reflecting its strategy of reinvesting available cash into growth initiatives.
Analyst consensus on stock valuation is mixed, with recommendations ranging from hold to buy. The average target price set by analysts is approximately $3.50, indicating a potential upside based on current market conditions.
| Analyst Recommendations | Count |
|---|---|
| Buy | 5 |
| Hold | 3 |
| Sell | 1 |
| Average Target Price | $3.50 |
Key Risks Facing Laird Superfood, Inc. (LSF)
Key Risks Facing Laird Superfood, Inc.
The financial health of Laird Superfood, Inc. is influenced by various internal and external risks. Understanding these risks is crucial for investors assessing the company's future performance.
Industry Competition
The competitive landscape in the plant-based food sector is intense. Laird Superfood faces competition from established brands as well as new entrants. This pressure can affect market share and pricing strategies.
Regulatory Changes
Changes in food safety regulations and labeling requirements can impact operational costs. For instance, compliance with the FDA’s regulations on food products may require additional investments in quality control and testing.
Market Conditions
Market volatility can significantly affect sales. Economic downturns may lead to reduced consumer spending on premium products, impacting revenue streams. For example, during the three months ended September 30, 2024, net sales increased by 28% year-over-year, but this growth could be threatened by economic shifts.
Operational Risks
Operational challenges, including supply chain disruptions, can affect product availability. In 2023, the company experienced stockouts due to a quality event, which led to a 133% increase in sales through Amazon in Q3 2024 as the supply chain stabilized.
Financial Risks
The company reported an operating loss of $1.7 million for the nine months ended September 30, 2024, a significant reduction from $10.3 million in the same period of 2023. Despite this improvement, continued losses pose a risk to financial stability.
Strategic Risks
Strategic decisions, such as changes in marketing spend, can impact sales performance. Sales and marketing expenses decreased by 20% in Q3 2024 compared to Q3 2023, reflecting a strategic shift aimed at improving profitability.
Mitigation Strategies
The company is focusing on optimizing its supply chain and improving margins through direct procurement of key raw materials. This strategy helped achieve a gross margin of 43% in Q3 2024, up from 31% in Q3 2023.
| Risk Factor | Description | Impact | Mitigation Strategies |
|---|---|---|---|
| Industry Competition | Pressure from established and new brands | Market share erosion | Innovative product development |
| Regulatory Changes | Changes in food safety laws | Increased compliance costs | Invest in quality control systems |
| Market Conditions | Economic downturns affecting consumer spending | Revenue decline | Diverse product offerings |
| Operational Risks | Supply chain disruptions | Product availability issues | Strengthen supplier relationships |
| Financial Risks | Continued operating losses | Financial instability | Cost reduction initiatives |
| Strategic Risks | Marketing spend reductions | Sales performance impact | Focus on ROI-driven marketing |
As of September 30, 2024, the company reported an accumulated deficit of $107.7 million, which reflects ongoing operational challenges.
Future Growth Prospects for Laird Superfood, Inc. (LSF)
Future Growth Prospects for Laird Superfood, Inc.
Analysis of Key Growth Drivers
The company has identified several key growth drivers including:
- Product Innovations: The introduction of new functional food products, particularly in the plant-based segment.
- Market Expansions: Increased distribution in grocery chains and e-commerce platforms.
- Acquisitions: Potential strategic acquisitions to bolster product offerings and market reach.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, net sales were $31,688,938, representing a 27% increase compared to $25,016,810 in the same period of 2023. The growth was driven by:
- 41% growth in e-commerce channel sales, including a significant 133% increase in Amazon sales in Q3 2024.
- Wholesale channel growth of 11% year-to-date.
| Period | Net Sales ($) | Growth (%) |
|---|---|---|
| Q3 2024 | $11,776,346 | 28% |
| YTD 2024 | $31,688,938 | 27% |
| Q3 2023 | $9,179,781 | N/A |
| YTD 2023 | $25,016,810 | N/A |
Strategic Initiatives or Partnerships that May Drive Future Growth
The company has undertaken several strategic initiatives:
- Expansion of its direct-to-consumer (DTC) sales through lairdsuperfood.com and pickybars.com.
- Enhanced marketing strategies focusing on digital platforms to improve customer engagement.
Competitive Advantages that Position the Company for Growth
Key competitive advantages include:
- A strong brand reputation for high-quality, plant-based products.
- Established relationships with major retailers and growing e-commerce presence.
- Agility in product development responding to consumer trends.
Financial Health Overview
As of September 30, 2024, the company reported:
- Gross Profit: $13,205,514, a 100% increase from $6,597,101 in 2023.
- Gross Margin: Improved to 41.7% from 26.4% year-over-year.
- Operating Expenses: Reduced to $14,901,287 from $17,342,257, a decrease of 14%.
| Measure | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Sales | $31,688,938 | $25,016,810 | $6,672,128 | 27% |
| Gross Profit | $13,205,514 | $6,597,101 | $6,608,413 | 100% |
| Operating Expenses | $14,901,287 | $17,342,257 | $(2,440,970) | (14%) |
Overall, the company is well-positioned to capitalize on growth opportunities through innovation, strategic partnerships, and operational efficiencies.
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Updated on 16 Nov 2024
Resources:
- Laird Superfood, Inc. (LSF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Laird Superfood, Inc. (LSF)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Laird Superfood, Inc. (LSF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.