HF Foods Group Inc. has reported its third-quarter 2025 results, revealing initial signs of operational progress. While key financial metrics showed improvement, the company’s equity valuation continues to trade significantly below prior-year levels, raising questions about the sustainability of a potential recovery.
Financial Performance Highlights
The distributor of Asian foods to restaurants posted a net sales figure of $307.0 million for Q3 2025, marking a 2.9% year-over-year increase. This growth was primarily driven by higher sales volumes and improved pricing within its Meat & Poultry and Seafood divisions.
More notably, the company’s bottom line showed substantial improvement. The net loss narrowed dramatically to $0.9 million, a significant reduction from the $3.8 million loss recorded in the same period last year. This improvement was attributed to a $0.6 million increase in operating income and a $3.2 million positive impact from the revaluation of interest rate derivatives.
Profitability metrics also edged upward. Gross profit rose slightly to $50.4 million, with the gross margin holding steady at 16.4%. A key measure of operational earnings, adjusted EBITDA, demonstrated strong momentum, surging 41.5% to reach $11.7 million.
Valuation and Capital Position Remain Challenging
Despite these operational gains, the market’s assessment of the company tells a different story. HF Foods currently carries a market capitalization of $139.51 million, representing a decline of approximately 26% over the past year. The stock’s performance has been under severe pressure, with shares plummeting 47.51% in the last six months alone. Since August 2018, the decline totals roughly 59%.
Should investors sell immediately? Or is it worth buying HF Foods?
The company’s balance sheet and liquidity provide some buffer. As of September 30, HF Foods held $12.3 million in cash and had access to approximately $49.8 million from a total credit facility of $125.0 million. However, the return on assets (ROA) stood at -8.8% as of December 2024, an 8.5 percentage point deterioration from the previous year.
In a notable move following the steep share price decline, CEO Lin Xi purchased a total of 4,494 common shares across two transactions on November 12, 2025.
Strategic Direction and Future Catalysts
Management has framed 2025 as a year of targeted investment, positioning HF Foods as a potential strategic acquirer. Corporate priorities include geographic expansion, the realization of operational synergies, and the evaluation of merger and acquisition opportunities.
In the near term, the improved adjusted EBITDA and available credit line are seen as supportive for the company’s liquidity. Analysts suggest that for a sustained stabilization in valuation to take hold, several clear criteria must be met: consistent margin improvement, a continued reduction in net losses, and the generation of visible, positive free cash flow. The absence of these developments is likely to maintain downward pressure on the stock’s valuation.
Ad
HF Foods Stock: Buy or Sell?! New HF Foods Analysis from December 12 delivers the answer:
The latest HF Foods figures speak for themselves: Urgent action needed for HF Foods investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 12.
HF Foods: Buy or sell? Read more here...
