Please ensure Javascript is enabled for purposes of website accessibility

Why SunOpta's Shares Dropped 18.1% on Wednesday

By Travis Hoium – Aug 11, 2021 at 5:00PM

Key Points

  • Growth of 9.7% topped estimates, but losses were bigger than expected.

Motley Fool Issues Rare “All In” Buy Alert

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earnings weren't as strong as investors were hoping for, but there are some silver linings.

What happened 

Shares of plant-based food company SunOpta Inc. (STKL 2.76%) fell as much as 18.1% in trading on Wednesday after reporting second-quarter 2021 financial results. Shares closed trading down 6.3% for the day. 

So what

Revenue increased 9.7% to $202.3 million in the quarter, driven by a 21.4% increase in plant-based products and offset by fruit-based sales falling 1.9%. The loss from continuing operations was $0.9 million, improving on a loss of $5.1 million a year ago, and net loss was $1.7 million, or $0.02 per share.

A field with growing plants.

Image source: Getty Images.

Analysts were expecting revenue of $198.9 million and a loss of $0.01 per share, so results were mixed, compared to Wall Street estimates. But that's to be expected in a growing company, and the miss wasn't too bad overall. 

Now what

Taking a step back, SunOpta's revenue is growing, and gross margins are up (13% vs 12.6% a year ago) in a tough commodity environment. Companies producing goods have struggled with higher costs that they can't pass on to customers, but SunOpta is navigating that environment well.

Given the trends in the business, I think today's sell-off is overdone. This is definitely an agriculture stock that I'm adding to my watchlist. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends SUNOPTA, INC. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SunOpta Inc. Stock Quote
SunOpta Inc.
$10.04 (2.76%) $0.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.