Village Farms “is positioned better than ever”, this analyst says

Doug Cooper of Beacon Securities raised his price target on Village Farms International (Village Farms International Stock Quote, Chart, News, Analysts, Financials NASDAQ:VFF) to US$5.50 from US$5.00 while maintaining a “Buy” rating after what he described as a “transformational” year for the company.

In a March 12 report, Cooper said Village Farms delivered a record 2025, with strong improvements across revenue, profitability and its balance sheet.

Village Farms reported Q4 revenue of US$49.6-million and fiscal 2025 revenue of US$216-million. Adjusted EBITDA was US$8.6-million in the fourth quarter and US$50-million for the full year, while earnings per share came in at US$0.02 for Q4 and US$0.19 for fiscal 2025.

International cannabis revenue totalled C$12.1-million in the fourth quarter and C$52.7-million for the year, compared with C$8.5-million in 2024. Revenue from the Netherlands cannabis market reached US$3.3-million in Q4 and US$9.9-million for the year, versus zero the prior year.

Cooper noted that the company’s Canadian cannabis segment, including international operations, generated gross margins of 43% and EBITDA margins of 27%, while its Netherlands cannabis business produced a 33.5% EBITDA margin across its first three quarters of contribution.

Village Farms ended the quarter with US$87-million in cash, net cash of US$53-million, and US$96-million in working capital, giving it one of the strongest balance sheets in the sector.

“On the back of its transformational year, we believe VFF is positioned better than ever to build upon its FY25 success,” Cooper said.

The analyst said the company benefits from a low-cost production model, high-quality product positioning and significant capacity expansion opportunities. Conversion of the company’s Delta 2 facility is expected to increase Canadian cannabis capacity by roughly 30%, while expansion of its Netherlands facility could increase production five-fold to 10 tonnes.

“This will move the company from its current ‘sold out’ position to having the ability to continue to gain share both in Canada and internationally,” Cooper said.

He added that broader industry trends also appear supportive. In Canada, fewer competitors and reduced production capacity have helped stabilize pricing, while the Netherlands’ legalization program continues to expand and Germany’s medical cannabis market is projected to grow from €2-billion today to more than €4.5-billion by 2028.

Based on its current expansion plans, Cooper believes Village Farms could eventually add roughly US$100-million in incremental revenue and more than US$30-million in EBITDA, implying a potential run-rate of over US$300-million in revenue and about US$80-million in EBITDA by late fiscal 2027 or 2028.

Beacon now forecasts fiscal 2026 revenue of US$259.0-million and Adjusted EBITDA of US$59.7-million, improving to US$289.1-million in revenue and US$67.8-million in Adjusted EBITDA in fiscal 2027.

Disclosure: The family of Nick Waddell owns shares of Village Farms

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