WEST Stock Forecast & Price Target

Westrock Coffee Co reported 4Q24 sales growth of 6.5% to $229 million, and forecasts indicate total sales growth of 9.0% to $914 million for the current year, with a further anticipated increase to $1.1 billion by 2026. The company’s Sustainable Sourcing & Traceability segment exhibited remarkable performance with a 38% sales increase to $55 million, highlighting its robust growth potential. Additionally, management expects approximately 50% annual growth in adjusted EBITDA over the next two years, driven by new retail customers, increased commitments from existing clients, and operational efficiencies from strategic initiatives.

Westrock Coffee Co. is facing considerable challenges as indicated by a projected 85 basis points decline in adjusted EBITDA margin to 5.5%, compounded by a forecasted total sales growth of only 1.0% to $216 million, driven primarily by a 6.5% decrease in the Beverage Solutions segment. Additionally, the company's 2025 adjusted EBITDA guidance of $60 million to $73 million falls short of previous forecasts and incorporates risks related to demand softness from higher coffee prices and delays in the Conway, AR facility onboarding. These headwinds, along with concerns over production execution and resulting impact on profitability, contribute to a negative financial outlook for Westrock Coffee's stock.