On November 19, 2025, Atrium Research analyst Nicholas Cortellucci, CFA, maintained a Buy rating on Organto Foods Inc. (OGO:TSXV; OGOFF:OTC), with an unchanged target price of CA$1.00, representing 54% upside from the current share price at the time of the report of CA$0.65.
The rating follows the company's third quarter 2025 financial results released after market close on November 18, which showed revenue ahead of estimates while profitability trailed expectations.
Third Quarter 2025 Financial Results
Organto Foods Inc. reported third-quarter revenue of CA$15.1 million compared to the analyst's estimate of CA$13.5 million, representing 189% year-over-year growth from CA$5.2 million in the third quarter of 2024. This marked the company's third-largest quarter in its history and its fourth consecutive quarter with greater than 100% year-over-year revenue growth. The third quarter represented 73% of fiscal 2024 full-year sales.
The revenue growth was attributed to new customers added to the company's roster and existing customers increasing their purchases. However, gross margin for the quarter came in at 8.2% compared to the analyst's estimate of 9.0% and 11.8% in the third quarter of 2024, which had been an all-time high. Despite the margin compression, gross profit in dollar terms increased 101% year-over-year.
EBITDA was negative CA$0.7 million versus the analyst's estimate of positive CA$0.2 million and negative CA$0.4 million in the prior year, due to losses on derivatives used to manage currency risk. Net income was negative CA$2.0 million compared to the estimate of negative CA$0.2 million.
Operating efficiency showed improvement as cash operating expenses were 8.7% of sales compared to 18.2% in the prior year, demonstrating leverage as the business scales and overheads are spread across a larger revenue base.
Balance Sheet Strengthening and Capital Structure
Organto ended the third quarter with CA$9.3 million in cash, including restricted cash, and CA$2.5 million in debt, prior to the prepayment of its convertible notes.
This compared favorably to the debt of CA$12.5 million in the third quarter of 2024, showcasing the effectiveness of the company's restructuring efforts. The company's current ratio stood at 2.0 times, reflecting a substantially strengthened balance sheet compared to its historical levels of less than 1.0 times.
Recent Corporate Developments
On November 17, 2025, Organto announced it had fully repaid its outstanding 10% convertible notes totaling CA$2.3 million plus CA$206.8 thousand in accrued interest, after providing the required 30-day notice during which no debenture holders chose to convert at CA$0.60 per share. The early elimination of these notes removed future dilution and debt-service obligations, strengthening the company's capital structure and improving financial flexibility.
On November 10, 2025, the company announced it had been upgraded from the OTCQB to the OTCQX and began trading under the symbol OGOFF after meeting higher financial, governance, and disclosure standards. This uplisting represents a key milestone expected to expand investor visibility.
In June 2025, the company completed a private placement of 4 million units at a price of CA$0.25 per unit, raising proceeds of CA$1.0 million. Each unit included one common share and one-half share purchase warrant, with each whole warrant exercisable for a common share at CA$0.35. The holder of 2 million half-warrants exercised their right to acquire 1.0 million shares at CA$0.35, providing the company with CA$350 thousand in proceeds. The resulting 1.0 million shares were issued with a hold period that expired on October 27, 2025.
In October 2025, director Javier Reyes made two separate purchases of 190,000 and 50,000 shares, respectively, bringing his total ownership to 9.07 million shares.
Management Commentary and Strategic Outlook
Management attributed the quarter's performance to its extensive restructuring and realignment efforts, believing these have set a solid foundation for future growth, stability, and a clear path to profitability. The team reiterated their optimism as the company aims to build a world-class company serving the growing healthy food markets.
The company completed a 21-month restructuring, repositioning, and refinancing in September 2025, which included selling certain underperforming subsidiaries, converting most debt to equity, and completing a series of private placements. Management is targeting accelerated growth in 2025, with 190% growth expected, by gaining market share in the fresh segment in Europe, potentially entering North America and the Middle East, and expanding into non-fresh organic ingredients.
Analyst Commentary and Valuation Methodology
Cortellucci stated: "Organto posted a solid quarter, continuing on its explosive growth trajectory." The analyst noted this was the company's "seventh consecutive quarter with >20% YoY sales growth." While margins were slightly below expectations, Cortellucci stated: "we believe Organto is on a solid path to profitability and low margins are expected for food marketers, with the peer group averaging an EBITDA margin of just 8% while doing >US$400M in sales."
The analyst added: "Given the rapid revenue growth, we can forgive the margin softness and look forward to further progress in Q4 and 2026." Cortellucci also expressed being "impressed by OGO prepaying its $2.3M of convertible debentures, making the Company essentially debt-free."
The analyst values Organto based on 2.0 times 2026 estimated sales, which compares to fellow high-growth consumer names in Canada at 3.0 times. Cortellucci urged investors to "try to find another company growing at these rates, supported by an elite management team who have a track record of success in the sector."
Investment Positives and Market Opportunity
The global organic foods market is expected to grow at an 11% compound annual growth rate over the coming years as consumer preferences continue to shift towards healthy and sustainable food segments. Organto is led by a team of industry professionals, including CEO and Co-Chair Steve Bromley, who spent 15 years at SunOpta Inc. (SOY:TSX, CA$600 million market cap) as CEO, CFO, and COO. The team also includes other SunOpta alumni and seasoned industry professionals.
The company controls approximately 68,000 hectares across Newfoundland and New Brunswick through its Humber Copper-Cobalt and Rocky Brook projects. The company's continuing operations grew sales 48% in 2024. Organto uses a strategic asset-lighter business model to serve a growing socially responsible and health-conscious consumer around the globe, with its business model rooted in commitment to sustainable business practices focused on environmental responsibility.
Financial Estimates and Market Data
Cortellucci's revised estimates for the fourth quarter of 2025 include revenue of CA$14.2 million compared to a previous estimate of CA$12.1 million, gross margin of 9.0% compared to 8.5% previously, and adjusted EBITDA of CA$0.2 million compared to negative CA$0.6 million previously.
For the full year 2025, the analyst estimates revenue of CA$60.1 million compared to a previous estimate of CA$36.2 million, gross margin of 8.1% compared to 8.9% previously, and adjusted EBITDA of negative CA$0.8 million compared to negative CA$4.0 million previously.
For fiscal 2026, estimates include revenue of CA$95.0 million compared to a previous estimate of CA$58.6 million, gross margin of 9.5% compared to 10.5% previously, and adjusted EBITDA of CA$2.8 million compared to CA$0.3 million previously.
The company has 187.8 million pro forma fully diluted in-the-money shares outstanding, resulting in a market capitalization of CA$122.1 million at the current share price. Organto reported cash of CA$9.3 million and debt of CA$2.5 million, resulting in an enterprise value of CA$115.3 million. Average daily trading volume is 146,300 shares. Management and the board own 19% of the company, with retail and family offices owning 81%.
Upcoming Catalysts
The analyst identified ongoing catalysts, including new customers, products, and suppliers, quarterly financial results, growth initiatives beyond the European fresh products platform expected in 2025/2026, and the establishment of operational financing facilities on an ongoing basis.
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Disclosure for Atrium Research, Organto Foods Inc., November 19, 2025
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