Home Bistro Inc. in Limelight Amid M&A Buzz in Ready-to-Eat Food Industry

The ready-to-eat food industry has enjoyed a renaissance of sorts in recent times. Among the many companies operating in this space, Home Bistro Inc. (OTC:HBIS) occupies an enviable spot as one of the more notable contenders, known for delivering ready-to-eat gourmet, chef-prepared meals. 

It’s also worth noting interest and activity of big-ticket companies in the ready-to-eat meal space.  Last week, HelloFresh made a ripple in the market after the meal kits giant acquired Factor75 Inc. The multi-million-dollar deal signifies HelloFresh’s strategy to branch out and reach consumers looking for healthy, fully prepared meals. In the news release announcing the acquisition, HelloFresh CEO Uwe Voss forecast that the direct-to-consumer, ready-to-eat meals category could reach considerable valuation.

In this context, it could be a good idea for investors to take a closer look at Home Bistro and its potential in a market that continues to heat up.

Financial Performance

One of the most efficient ways to determine a company’s current state is to explore its latest financial performance. Home Bistro recently reported year-over-year revenue growth of 54% and 59%, respectively, for the three and nine-month periods ended Sept. 30, 2020.

In the earnings release, Home Bistro CEO Zalmi Duchman attributed this performance to the company’s decision to bring its food preparation and fulfilment operations in-house. The company also went public and completed a corporate name change, increasing the potential for capital, and solidifying brand consistency and visibility. Duchman noted that by gaining control of production and fulfilment, Home Bistro’s profit margins are also expected to improve. He added that the company is now on track to launch its latest line of ready-to-eat meals created by renowned “Iron Chef,” Cat Cora.

In the first nine months of 2020, Home Bistro incurred charges of non-cash and non-recurring nature to the tune of $812,000, most of which was allocated to salaries, performance-based fees in equity, and costs for developing its products. However, the company closely managed its operating costs and kept advertising to a minimum, both of which contributed to revenue growth.

 

Cat Cora announces Home Bistro Partnership on Steve Harvey Show

Peer Acquisition

While the recent financial performance must have triggered optimism among market watchers and investors, it is also important to look at the bigger picture. HelloFresh, a behemoth in the meal kits industry, has entered the ready-to-eat meals space as a way to accelerate its growth in the United States.

A quick advance on this strategy was the company’s recent $277 million acquisition of Factor75.  Factor75 operates in the same industry as Home Bistro, where it supplies fully prepared, “restaurant quality” healthy meals. The fact that one of the biggest companies in the meal kits space has acquired a smaller player in a complementary vertical indicates industry growth in coming years.

It also signifies that Home Bistro has incredible potential if other industry giants recognize this growth. If Home Bistro can continue its current growth-rate for several years, it could become the subject of a generous acquisition offer like Factor75. Hence, it could be worthwhile for investors to keep the Home Bistro stock in their watch lists and track the company’s performance.

Home Bistro CEO Discusses Recent Sector Activity and Company Performance in New Audio Interview at SmallCapVoice.com

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About the Author

Stuart Smith is the CEO and Founder of SmallCapVoice.com. SmallCapVoice.com. is a recognized corporate investor relations firm, with clients nationwide, known for its ability to help emerging growth companies build a following among retail and institutional investors. SmallCapVoice.com utilizes its stock newsletter to feature its daily stock picks,  audio interviews, as well as its clients’ financial news releases. SmallCapVoice.com also offers individual investors all the tools they need to make informed decisions about the stocks they are interested in. Tools like stock charts, stock alerts, and Company Information Sheets can assist with investing in stocks that are traded on the OTC BB and Pink Sheets. To learn more about SmallCapVoice.com and their services, please visit us here.

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