Roth MKM Upgrades Laird Superfood to Strong Buy, Projects Significant Growth

Roth MKM's George Kelly upgraded their rating on Laird Superfood (NYSEMKT: LSF) from Hold to Strong Buy on May 9th, 2024. The analyst also raised their price target by 246.2% from $1.3 to $4.5.

Laird Superfood, a company known for its offerings of powdered and liquid coffee creamers, coconut water products, supplements, coffee, tea, hot chocolate, Pili nuts, and Harvest dates, recently reported its Q1 2024 earnings on May 8th. The results impressed Kelly, who referred to the quarter as "another strong quarter" and highlighted the company's transformation since mid-2023. According to the analyst, Laird Superfood has achieved more consistent growth and significantly higher margins.

The Q1 2024 earnings report showed a loss per share of $0.11, surpassing the Zacks Consensus Estimate of $(0.20) and representing a 73% improvement over Q1 2023's loss per share of $(0.40). Additionally, the company reported revenue of $9.91 million, beating the Zacks Consensus Estimate by 6.55% and demonstrating a 22.2% increase compared to Q1 2023's revenue of $8.11 million. Although the gross margin slightly decreased from 40.4% in Q1 2023 to 40% in Q1 2024, Kelly believes that the improvements made by Laird Superfood are sustainable and expects continued growth in the future.

Looking ahead, Laird Superfood's management provided guidance for FY 2024, projecting revenue of $38 million to $42 million, representing a year-over-year growth rate of 11% to 23%. The company also expects a gross margin of 37% to 41%. CEO Jason Vieth expressed his satisfaction with the Q1 results and emphasized the achievement of growth and margin goals. He highlighted the company's 22% net sales growth during the quarter, which he believes positions Laird Superfood as one of the top performers in the food industry.

CFO Anya Hamill also commented on the company's financial results, noting the team's efforts in executing strategic initiatives. Hamill highlighted the 22% net sales growth, the 17-point improvement in gross margin compared to the same period in 2023, and the reduction of operating expenses by $1.1 million. She emphasized the company's strong balance sheet with no debt and $7.3 million in cash as of March 31st, 2024. Hamill stated that Laird Superfood's projected cash reserves are sufficient to fund operations into 2026 and beyond. Based on the strong Q1 results, the company raised its outlook for net sales to $38 million to $42 million and raised the projected gross margin to 37% to 41%.

In addition to the positive analyst rating from Roth MKM's George Kelly, Canaccord Genuity's Bobby Burleson also issued an update on LSF on May 9th. Burleson raised the price target by 40%, from $2.5 to $3.5, while maintaining a Strong Buy rating on the stock. These positive ratings from both analysts indicate a favorable sentiment towards Laird Superfood's future performance.

It is worth noting that 100% of top-rated analysts currently rate LSF as a Strong Buy or Buy, with no analysts recommending a Hold or selling the stock. This consensus among analysts further reinforces the positive outlook for Laird Superfood.

Since the release of the company's Q1 2024 earnings report on May 8th, the stock price of LSF has seen a 4.9% increase. Looking at the year-over-year performance, the stock has surged by an impressive 230.2%. Comparatively, during the same period, LSF has outperformed the S&P 500, which recorded a 26.6% increase.

Roth MKM analyst George Kelly is highly regarded in the industry, ranked in the top 20% out of 4,579 Wall Street analysts by WallStreetZen. With an average return of 4.7% and a win rate of 45.6%, Kelly specializes in the Consumer Defensive and Consumer Cyclical sectors, among others.

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