Edible Garden AG Incorporated's Q1 Earnings Report Analysis

• Edible Garden AG Incorporated (NASDAQ:EDBL) reported a significant miss in Q1 earnings with an EPS of -$2.47 against an estimated -$0.74.
• The company is shifting towards higher-margin, shelf-stable products, resulting in a 15% increase in non-perishable revenue and a nearly fourfold increase in gross profit.
• Despite positive developments in product realignment, EDBL faces financial challenges with a negative price-to-earnings ratio of approximately -0.58 and difficulties in generating positive cash flow.

Edible Garden AG Incorporated (NASDAQ:EDBL) is a company focused on producing sustainable and innovative agricultural products. On May 15, 2025, EDBL reported its Q1 earnings, revealing an earnings per share (EPS) of -$2.47, which was significantly below the estimated EPS of -$0.74. The company's revenue also fell short, coming in at $2.72 million against an expected $4.48 million.

During the earnings call, CEO Jim Kras and Interim CFO Kostas Dafoulas discussed the company's strategic shift towards higher-margin, shelf-stable products. This shift resulted in a 15% increase in non-perishable revenue and a nearly fourfold increase in gross profit compared to the previous year. Despite these positive developments, the company's financial metrics indicate ongoing challenges.

EDBL's negative price-to-earnings (P/E) ratio of approximately -0.58 reflects its current losses. The price-to-sales ratio of about 0.21 suggests that the market values the company's sales at a relatively low level compared to its stock price. Additionally, the enterprise value to sales ratio is slightly higher at 0.23, indicating the company's total valuation, including debt.

The enterprise value to operating cash flow ratio is negative at around -0.38, highlighting difficulties in generating positive cash flow from operations. The earnings yield is also negative at approximately -1.71%, underscoring the company's financial struggles. However, the debt-to-equity ratio of approximately 0.93 suggests a moderate level of debt compared to equity.

The current ratio of about 1.19 indicates that EDBL has a slightly higher level of current assets compared to its current liabilities, providing some short-term financial stability. Despite the challenges, the company's strategic focus on product realignment and operational efficiency aims to support long-term profitability and align with consumer demand.