Breaking Down cbdMD, Inc. (YCBD) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in the ever-evolving CBD market? Have you been following cbdMD, Inc. (YCBD) and wondering about its financial stability? In 2024, the company's revenue reached $19.48 million, reflecting a -19.35% decrease compared to the previous year. However, losses significantly improved, dropping by -71.40% to -$7.70 million. With such mixed signals, understanding the key factors driving cbdMD's financial performance is crucial for making informed investment decisions. Dive in to explore the insights that will help you assess the financial health of YCBD.

cbdMD, Inc. (YCBD) Revenue Analysis

Analyzing cbdMD, Inc. (YCBD)'s revenue streams involves examining its primary sources, growth trends, and the contribution of different business segments to its overall financial performance. Here's a breakdown:

Primary Revenue Sources:

• Direct-to-Consumer (DTC) Sales: A significant portion of cbdMD's revenue comes from direct sales to consumers through its online platform. In the first quarter of fiscal year 2025, DTC net sales accounted for 77% of total net sales, amounting to $4.0 million.
• Wholesale Net Sales: cbdMD also generates revenue through wholesale distribution. In the same period, wholesale net sales reached $1.1 million, representing 23% of the total net sales.
• Product Categories: cbdMD operates several brands including cbdMD, Paw CBD, and ATRx, offering a variety of products such as CBD tinctures, gummies, topicals, capsules, and pet products.

Year-over-Year Revenue Growth Rate:

cbdMD has experienced fluctuating revenue growth rates over the past several years.

• Q1 2025: Net sales totaled $5.1 million, a 19.1% decrease compared to $5.3 million in the first quarter of fiscal year 2024. However, this represented a 12% sequential increase from the fourth quarter of fiscal year 2024.
• Fiscal Year 2024: Annual revenue was $19.48 million, a 19.35% decrease compared to the previous year's $24.16 million.
• Fiscal Year 2023: Annual revenue was $24.16 million, a 31.77% decrease from $35.40 million in 2022.
• Fiscal Year 2021: Demonstrated a 6.20% increase.
• Fiscal Year 2020: Showed a substantial 77.09% increase.

The recent trend indicates a decline in year-over-year revenue, though there have been some quarters with sequential growth.

Contribution of Business Segments:

The company's revenue is divided between direct-to-consumer sales and wholesale.

• Direct-to-Consumer (DTC): In Q1 2025, DTC sales made up 77% of the total revenue.
• Wholesale: Accounted for 23% of the total revenue in Q1 2025, showing a 22% increase from the previous year.

Significant Changes in Revenue Streams:

Several factors have influenced cbdMD's revenue streams:

• Market Competition: The CBD industry is highly competitive, which may affect cbdMD's ability to maintain and grow its market share.
• Product Demand: Fluctuations in consumer demand for CBD products can impact revenue.
• Strategic Initiatives: The company has launched new products, such as the Herbal Oasis ready-to-drink beverage, to tap into growing segments of the industry.
• Operational Efficiencies: Efforts to optimize the cost structure and improve operational efficiencies have been a key focus.

Here is a table summarizing cbdMD's revenue from 2018 to 2024:

For insights into the company's goals, see Mission Statement, Vision, & Core Values of cbdMD, Inc. (YCBD).

cbdMD, Inc. (YCBD) Profitability Metrics

Analyzing cbdMD, Inc.'s profitability involves examining several key metrics to understand its financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, as well as trends in these figures over time.

For the first quarter of fiscal year 2025, which ended December 31, 2024, cbdMD, Inc. reported:

• Net sales of $5.1 million, a 19.1% decrease compared to $5.3 million in fiscal 2024.
• However, this also reflects a 12% sequential increase from the fourth quarter of fiscal year 2024.
• The company achieved a net income of $15,000, which represents an approximate $1 million improvement from the prior year.
• Gross profit margin was maintained at 66%.
• Operating loss significantly reduced to $80,000 from $1.1 million in the previous year.

For the full fiscal year ended September 30, 2024, cbdMD, Inc. reported:

• Revenue of $19.48 million, a 19.35% decrease compared to the previous year's $24.16 million.
• Losses were $7.70 million, a 71.40% less than in 2023.
• Gross profit margin of 62% was maintained.
• Loss from operations was reduced to $3.3 million, a $19.1 million year-over-year improvement from the $22.9 million loss in the prior year.

Third quarter of fiscal year 2024 (ending June 30, 2024):

• Net sales totaled $5.1 million, a 15% decrease compared to $6.1 million for the prior year.
• Net loss attributable to common shareholders was approximately $0.5 million, or $0.15 per share, as compared to a net loss of approximately $2.8 million, or $1.16 per share, for the third fiscal quarter of 2023.
• Gross profit was 65% compared to 63% in the second quarter of fiscal 2023.
• Loss from operations was $0.38 million compared to a loss of $1.8 million in the third quarter of fiscal 2023.
• Net income was approximately $0.46 million, as compared to a net loss of approximately $1.7 million for the third fiscal quarter of 2023.

Here's a summary of cbdMD's financial performance in 2024:

The company has shown improvements in reducing operational losses and achieving positive net income in certain quarters, but faces challenges in maintaining revenue growth. Strategic cost management and expense optimization reflect the company's focus on enhancing its operational stability. For more insights into cbdMD, Inc.'s values, see: Mission Statement, Vision, & Core Values of cbdMD, Inc. (YCBD).

cbdMD, Inc. (YCBD) Debt vs. Equity Structure

Understanding how cbdMD, Inc. (YCBD) manages its debt and equity is crucial for investors. This involves looking at the company’s debt levels, its debt-to-equity ratio, and any recent financing activities. Here’s a breakdown:

As of the third quarter of fiscal year 2024, cbdMD, Inc. (YCBD) reported the following debt information:

• Total current liabilities: $5.88 million
• Total liabilities: $7.98 million

These figures provide a snapshot of the company's obligations due within the next year and its overall liabilities.

The debt-to-equity ratio is a key metric for assessing financial leverage. It indicates the proportion of debt and equity a company uses to finance its assets. Unfortunately, the exact debt-to-equity ratio for cbdMD, Inc. (YCBD) as of the latest filings isn't explicitly stated in the provided search results. However, we can provide context based on available data and industry practices.

Generally, a lower debt-to-equity ratio suggests a more conservative financing approach, while a higher ratio indicates greater financial risk. Industry standards vary, so comparing cbdMD, Inc. (YCBD) to its peers in the health and wellness or consumer packaged goods sectors would provide a more meaningful benchmark.

Recent financial activities, such as debt issuances or refinancing, can significantly impact a company's financial structure. According to news from March 2024, cbdMD, Inc. (YCBD) announced that its operating subsidiary, cbdMD Therapeutics, Inc., entered into a securities purchase agreement for $2.0 million in a convertible note offering. The proceeds are intended for working capital and general corporate purposes. This type of financing can provide the company with necessary funds but also introduces potential dilution for existing shareholders upon conversion.

Balancing debt and equity is a strategic decision. Debt financing can offer tax advantages and doesn't dilute ownership, but it also creates fixed payment obligations. Equity financing, on the other hand, doesn't require repayment but dilutes existing ownership. cbdMD, Inc. (YCBD)'s choice between debt and equity likely reflects its growth strategy, market conditions, and financial health.

Here is a summary of liabilities and equity for cbdMD, Inc. (YCBD) based on available data:

For further insights into cbdMD, Inc. (YCBD)'s financial health, you can read more here: Breaking Down cbdMD, Inc. (YCBD) Financial Health: Key Insights for Investors

cbdMD, Inc. (YCBD) Liquidity and Solvency

Analyzing cbdMD, Inc.'s (YCBD) financial health requires a close look at its liquidity and solvency. These metrics provide insights into the company's ability to meet its short-term obligations and long-term financial stability.

Assessing cbdMD, Inc.'s Liquidity:

• Current and Quick Ratios: These ratios measure a company's ability to pay off its current liabilities with its current assets. A healthy current ratio is generally considered to be between 1.5 and 2.0, indicating that the company has enough liquid assets to cover its short-term liabilities. The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity.
• Analysis of Working Capital Trends: Monitoring the trend of working capital (current assets minus current liabilities) helps in understanding the company's operational efficiency and short-term financial health. A positive and increasing working capital balance typically indicates improving liquidity, while a negative or declining balance could signal potential issues.
• Cash Flow Statements Overview: A review of the cash flow statements, focusing on operating, investing, and financing activities, is crucial. Positive cash flow from operations indicates that the company is generating enough cash from its core business activities to cover its expenses and invest in future growth.

Examining cbdMD, Inc.'s (YCBD) cash flow trends offers vital clues about its financial robustness. Here's a closer look:

Cash Flow Trends:

• Operating Cash Flow: Ideally, this should be positive, showing the company's core activities generate sufficient cash.
• Investing Cash Flow: This indicates investments in assets. Consistent outflows might suggest growth, but large, sustained outflows need careful evaluation.
• Financing Cash Flow: This covers debt, equity, and dividends. It reveals how the company funds its operations and returns value to shareholders.

Potential liquidity concerns or strengths are identified by analyzing these elements. For example, consistently strong operating cash flow and healthy current and quick ratios would indicate a strong liquidity position. Conversely, negative operating cash flow, declining working capital, and low liquidity ratios could signal potential financial distress.

For further insights into cbdMD, Inc.'s (YCBD) mission, vision, and core values, you can refer to Mission Statement, Vision, & Core Values of cbdMD, Inc. (YCBD).

cbdMD, Inc. (YCBD) Valuation Analysis

Determining whether cbdMD, Inc. (YCBD) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. These elements, when combined, provide a comprehensive view of the company's intrinsic value relative to its current market price.

Price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios:

• P/E Ratio: This ratio compares a company's stock price to its earnings per share (EPS). A high P/E ratio might suggest that a stock is overvalued because investors are paying more for each dollar of earnings. Conversely, a low P/E ratio could indicate undervaluation.
• P/B Ratio: The price-to-book ratio measures a company's market capitalization against its book value of equity. A lower P/B ratio may suggest undervaluation, as the market price is low relative to the company's net asset value.
• EV/EBITDA: This ratio compares a company's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It's useful for evaluating companies with different capital structures. A lower EV/EBITDA multiple may indicate that a company is undervalued compared to its peers.

Unfortunately, I don't have the real-time P/E, P/B, and EV/EBITDA ratios, or dividend yields for cbdMD, Inc. (YCBD) as of today's date. To find these, you would typically consult financial data providers such as Yahoo Finance, Google Finance, or Bloomberg.

Stock price trends over the last 12 months (or longer):

Analyzing the stock price trends of cbdMD, Inc. (YCBD) over the past year, or longer, provides insights into market sentiment and company performance. An upward trend may indicate positive investor confidence, driven by factors such as revenue growth, product innovation, or favorable market conditions. Conversely, a downward trend could signal concerns about the company's prospects, potentially due to increased competition, regulatory challenges, or financial underperformance.

Dividend yield and payout ratios (if applicable):

• Dividend Yield: If cbdMD, Inc. (YCBD) pays dividends, the dividend yield (annual dividend per share divided by the stock price) indicates the return on investment from dividends alone. A higher yield can be attractive to income-seeking investors.
• Payout Ratio: The payout ratio (dividends paid as a percentage of earnings) shows the sustainability of the dividend payments. A lower payout ratio suggests that the company has room to maintain or increase dividends in the future.

Analyst consensus on stock valuation (buy, hold, or sell):

Financial analysts regularly provide ratings and price targets for publicly traded companies. These ratings typically fall into categories such as buy, hold, or sell, reflecting the analyst's opinion on whether the stock is likely to outperform, perform in line with, or underperform the market. The consensus rating, which is an average of multiple analysts' opinions, can provide a useful summary of market sentiment towards cbdMD, Inc. (YCBD). Aggregated analyst ratings and price targets are often available on financial news websites and brokerage platforms.

To get a more complete picture of cbdMD, Inc. (YCBD)'s valuation, consider comparing its ratios and stock performance to those of its industry peers. This relative valuation approach can help you determine whether the company is trading at a premium or discount to its competitors.

Here you can find more information: Breaking Down cbdMD, Inc. (YCBD) Financial Health: Key Insights for Investors

cbdMD, Inc. (YCBD) Risk Factors

Investing in cbdMD, Inc. (YCBD) involves navigating a landscape of both internal and external risks that can significantly impact its financial health. These risks span from intense industry competition and evolving regulatory environments to specific operational, financial, and strategic challenges detailed in the company's filings.

Here's an overview of key risks:

• Industry Competition: The market for CBD products is highly competitive. cbdMD, Inc. faces competition from numerous companies, including those with greater financial resources and established brands. Increased competition could lead to price wars, reduced market share, and decreased profitability.
• Regulatory Changes: The regulatory landscape for CBD products is constantly evolving. Changes in laws and regulations at the federal, state, and local levels could impact the legality, production, distribution, and sale of cbdMD, Inc.'s products. This includes potential restrictions on marketing and advertising, which could limit the company's ability to reach its target audience.
• Market Conditions: Changes in consumer preferences, economic downturns, and other market conditions could negatively affect demand for cbdMD, Inc.'s products. For example, a shift in consumer perception regarding the safety or efficacy of CBD could lead to decreased sales.

Operational, financial, and strategic risks highlighted in recent earnings reports or filings may include:

• Operational Risks: These include challenges related to supply chain management, production costs, and quality control. Disruptions in the supply of raw materials or issues with product quality could harm the company's reputation and financial performance.
• Financial Risks: cbdMD, Inc. may face risks related to its ability to manage its cash flow, secure financing, and maintain profitability. Fluctuations in revenue, increased operating expenses, or difficulties in collecting accounts receivable could strain the company's financial resources.
• Strategic Risks: These encompass risks associated with the company's business strategy, such as its ability to innovate, expand into new markets, and effectively manage its brand. Failure to adapt to changing market conditions or successfully execute its strategic initiatives could hinder growth and profitability.

Mitigation strategies or plans (if available) might involve:

• Diversifying product offerings to reduce reliance on specific products or markets.
• Strengthening supply chain relationships to ensure a stable supply of raw materials.
• Implementing robust quality control measures to maintain product integrity and safety.
• Enhancing marketing and branding efforts to differentiate cbdMD, Inc.'s products from competitors.
• Pursuing strategic partnerships or acquisitions to expand market reach and capabilities.

Understanding these risks is crucial for investors to make informed decisions about cbdMD, Inc. (YCBD). For further insights into the company's mission, vision, and core values, refer to Mission Statement, Vision, & Core Values of cbdMD, Inc. (YCBD).

cbdMD, Inc. (YCBD) Growth Opportunities

For investors eyeing cbdMD, Inc. (YCBD), understanding its potential for future growth is crucial. Several factors appear poised to influence the company's trajectory, ranging from strategic product development to broader market penetration.

Key Growth Drivers:

• Product Innovations: cbdMD, Inc.'s ongoing investment in research and development allows them to release new and improved products.
• Market Expansions: Exploring new markets, both domestic and international, could significantly increase revenue streams.
• Strategic Acquisitions: The company might pursue acquisitions to consolidate market share or enter new product categories.

To provide a clearer picture, a SWOT analysis can illuminate cbdMD, Inc.'s internal strengths and weaknesses, as well as external opportunities and threats. While specific forward-looking revenue projections and earnings estimates are not available, examining past performance and current market dynamics can provide insights.

Strategic Initiatives and Partnerships:

Strategic alliances and partnerships play a vital role in cbdMD, Inc.'s growth strategy. These collaborations can enhance market reach, product development, and brand recognition. Here's how:

• Market Reach: Partnerships with major retailers or distributors can get products into more stores and in front of more customers.
• Product Development: Collaborating with research institutions or other companies to create new and innovative products.
• Brand Recognition: Partnering with well-known brands or influencers can boost brand awareness and credibility.

Competitive Advantages:

Several competitive advantages could position cbdMD, Inc. for sustained growth:

• Brand Recognition: A strong brand reputation can foster customer loyalty and attract new customers.
• Product Quality: High-quality products can differentiate cbdMD, Inc. from competitors and command premium pricing.
• Distribution Network: An efficient and extensive distribution network ensures products are readily available to consumers.

Further insights can be found in Breaking Down cbdMD, Inc. (YCBD) Financial Health: Key Insights for Investors.