What Happened?
Shares of plant-based food and beverage company SunOpta (NASDAQ: STKL) fell 20% in the morning session after the company reported underwhelming earnings. The company posted revenue of $205.4 million, a 16.6% increase from the prior year, and even raised its sales forecast for the full year. However, investors focused on a significant decline in profitability. SunOpta’s gross profit margin, a key measure of how much profit it makes on each sale, fell to 12.4% from 17% in the same quarter last year. This 4.6 percentage point drop overshadowed the strong sales figures, signaling to investors that higher costs for materials and production were eating into the company's earnings and raising concerns about the quality of its growth.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy SunOpta? Access our full analysis report here.
What Is The Market Telling Us
SunOpta’s shares are quite volatile and have had 17 moves greater than 5% over the last year. But moves this big are rare even for SunOpta and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 26.8% on the news that the company reported strong first quarter 2025 results which significantly beat analysts' revenue, EPS, and EBITDA expectations, and included a raise to full-year revenue guidance. Revenue rose 10% as more people bought its drinks, snacks, and broth, even though the company cut prices a bit and left one category behind. Overall, we think this was a solid quarter with some key metrics above expectations.
SunOpta is down 49.1% since the beginning of the year, and at $3.94 per share, it is trading 50.1% below its 52-week high of $7.89 from December 2024. Investors who bought $1,000 worth of SunOpta’s shares 5 years ago would now be looking at an investment worth $546.46.
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