Rocky Mountain Chocolate Factory, Inc. (RMCF) Company Bio
Rocky Mountain Chocolate Factory, Inc., together with its subsidiaries, operates as a confectionery franchisor, manufacturer, and retail operator. It operates through five segments, Franchising, Manufacturing, Retail Stores, U-Swirl Operations, and Other. The company produces approximately 350 chocolate candies and other confectionery products, including clusters, caramels, creams, mints, and truffles; and offers 15 varieties of caramel apples and other products that are prepared in individual stores, as well as provides ice cream, coffee, and other sundries. The company was founded in 1981 and is based in Durango, Colorado.
RMCF Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Rocky Mountain Chocolate Factory Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Rocky Mountain Chocolate Factory Inc ranked in the 36th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Rocky Mountain Chocolate Factory Inc ended up being:
The compound growth rate in the free cash flow of Rocky Mountain Chocolate Factory Inc over the past 5.88 years is -0.11%; that's higher than only 13.2% of free cash flow generating stocks in the Consumer Defensive sector.
RMCF's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 51.44% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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One of Warren Buffett's most frequently quoted wisdoms is: "Only invest in a company whose business you understand." I think most people can relate to confectionery. You don't need a degree in chip technology or aerospace engineering to understand the Rocky Mountain Chocolate Factory (RMCF) business model. This is one...
Financial Skeptic on Seeking Alpha | June 30, 2020
DURANGO, CO / ACCESSWIRE / May 11, 2020 / Rocky Mountain Chocolate Factory, Inc. (RMCF) (the "Company"), which franchises gourmet chocolate and confection stores and manufactures premium chocolates and other confectionery products, today provided an update regarding the impact of the novel coronavirus (COVID-19) pandemic and related global economic conditions on the Company's business. The Company is also announcing certain actions that management and the Company's Board of Directors (the "Board") are implementing to enhance the Company's liquidity given the business disruptions and current global economic conditions resulting from the COVID-19 pandemic, including the vast mandated self-quarantines and closures of non-essential business throughout the United States and around the world...