VFF - Bigger In Texas: Village Farms' Greenhouses Spanning Over 100 Football Fields Could Dominate US Cannabis Market | Benzinga
In a recent webinar organized by Zuanic & Associates, Village Farms' C-suite executives discussed their strategic direction and operational insights. The webinar, led by senior analyst Pablo Zuanic, provided a deep dive into Village Farms' market position, financial health and future outlook. "We were pioneers and innovators in cultivation over the last 35 years," said Michael A. DeGiglio, president and CEO of Village Farms. "Our strategy is to build a global cannabis platform."
Financial Performance And Valuation
Zuanic Associates raised their projections for Village Farms International (NASDAQ: VFF) due to strong double-digit growth in the Canadian recreational cannabis business and anticipated increased bulk sales for re-export. With improving gross margins, stable SG&A expenses and operating leverage from increased sales, the earnings outlook is positive.
The stock trades at 0.3x EV/Sales and 5x EBITDA at the consolidated level. The cannabis unit alone is valued at $7 million when excluding non-cannabis assets. Despite a 23% stock decline over the past month, in line with the industry, Zuanic & Associates views VFF as a blue chip in the Canadian sector, highlighting its sustainable business model and current buying opportunity.
Cost Leadership And Production Strategy
Village Farms has consistently maintained cost leadership through its greenhouse growing techniques and focus on price compression. DeGiglio emphasized the importance of being a low-cost producer in agriculture, a strategy successfully applied to their cannabis operations. "We knew that our business model had to be based on price compression and