Penny Stock BranchOut Food: Why It Won’t Stay Cheap for Long

Key Points

• BranchOut Food is in the hypergrowth phase and is likely to double in size numerous times in the next few quarters.
• Customers like Costco are ramping up their orders, driving expanded awareness of this brand.
• An acquisition could be in this stock's future, with potential buyers being major players with deep pockets. 

BranchOut Food NASDAQ: BOF invigorated its market with news of ramping production, improving revenue and profitability. The stock is up 200% from its 2024 lows and still has a solid move ahead of it, potentially gaining another 1000% or more. The news cycle reveals that management is executing well on its plans that the product is resonating with consumers. The company produces a range of dehydrated fruits and vegetables for snacking and ingredient purposes. Customers span the range from end-consumers to leading food manufacturers, and the list is growing. Popular products include crispy avocado slices, pineapple chips, crunchy bell pepper, and brussel sprout snacks. 

Among the critical details is the company’s established and strengthening position with the “nation's largest membership club,” which Google will tell you is Costco. Costco is ramping its orders sequentially, leading the company to issue robust guidance for the year’s first half. The company projects revenue to reach $9 million, which is significant growth but a tiny amount relative to the estimated billions in value tagged to the dried food industry. 

Estimates vary, but generally, the global dehydrated food industry is worth at least $50 to over $350 billion annually. BranchOut is positioned to take a share within that market and can gain a significant foothold because of its diverse offerings and revenue streams. It can deepen its penetration of Costco shelves with deals with producers like Taylor Farms and grow to other leading grocery chains, including Walmart NYSE: WMT and Kroger NYSE: KR. 

Costco isn’t the only national player turning to BranchOut. Family-owned Taylor Farms, the nation's largest salad kit maker, started using BranchOut with an initial order for crunchy cherry tomatoes. The deal is worth $175,000 and could easily expand into the millions if Taylor Farms uses additional items. 

BranchOut Food Enters Hypergrowth Phase

BranchOut Food is in a hypergrowth phase, with Q1 revenue forecasted to grow more than 150% and accelerate as the year progresses. The latest update has the first half of 2025 revenue up more than 200%, and profitability is expected soon. The company recently commissioned a new processing plant in Peru, which increased the production capacity by $40 million annually. The move not only increased capacity but also widened the margin by bringing production in-house. The company says the new facility is immediately profitable and positive cash flow is expected this quarter. 

BranchOut Food has debt on the balance sheet and may need to raise additional capital, but the load is manageable, and significant dilution is not expected. Total liability at the end of the last reported quarter was running about 3x equity and 1x assets, with assets primarily property and plant and deposits on orders, which are growing substantially in 2025. Equity is positive and likely to grow significantly over the next few years. The company is already looking to expand capacity again, ensuring a smooth production ramp as it scales to a global level. 

BranchOut Food Is a Takeover Target

BranchOut Food is on track for profitability and can grow as a standalone company, but its future may lie in other directions. Not only is it a desirable asset for snack and packaged food makers like PepsiCo NASDAQ: PEP and Kraft Heinz NASDAQ: KHC, who have the power to unlock global sales. Acquiring BranchOut will help them sustain revenue growth while expanding into healthier verticals. 

The price action in BOF stock is good. Down from the IPO highs, the market remains volatile but shows a strong base and bottom at $1.20. The latest action has the market up off the bottom, spurred higher by the news cycle, which helped sustain a higher price point into the first weeks of 2025. Assuming the news cycle continues to be positive, this market should advance from these levels and maintain an upward trajectory for several years.