1 Upstart Canadian Company Is Changing the Way We Eat Food

The Goodfood Market stock is a great pick for growth investors. The Canadian upstart is changing the way people eat and is well positioned to dominate the e-commerce grocery and meal solutions industry in 2021.

| More on:
Top view of people having party, gathering, celebrating together

Image source: Getty Images

COVID-19 has turned the world upside down and continues to disrupt daily routines. Many people are working from home while the pandemic is still around. Entertainment is confined in homes, and businesses are bellying up because of lockdowns. Customers in dine-restaurants, in particular, are scant, if not absent.

The health crisis is likewise altering eating habits and changing the way we eat. In Canada, the uptake of ready-to-eat meals is growing. It’s convenient, practical, and frees people staying at home from the hassles of cooking. GoodFood Market (TSX:FOOD), an upstart from Montreal, is becoming a household name.

Investment banking to meal-kit preparation

Jonathan Ferrari and Neil Cuggy, former investment bankers at Royal Bank of Canada Capital Markets, are the founders of Goodfood Market. After a rebranding of its original name Culiniste, the company went public and debuted on the Toronto Stock Exchange in June 2017.

The initial focus was preparing meal kits until the opportunity to expand presented itself. Today, Goodfood offers ready-to-eat meals, grocery items, and breakfast products. This $560.76 million online grocery, home meal and meal-kit company competes with larger rivals HelloFresh and MissFresh. However, Goodfood is receiving rave reviews from satisfied customers.

TSX30 2020

The TSX came out with its second edition of TSX30 in September this year. Goodfood Market ranked number 20 among the growth stocks that represent sustained excellence over the long term. Only the companies with a three-year performance of more than 129% are in the top 30 list.

Goodfood is has been doing great since its IPO. As of December 8, 2020, the stock trades at $8.28 per share from $1.90 on June 19, 2017, or 336% growth. Had you invested $25,000 since, your money would have grown to $108,947.37 in the present. Year to date, investors are winning by 165%.

Increasing patronage

In the first quarter of the fiscal year 2021, the number of active subscribers grew by 33% compared to the same period in Fiscal 2019. Goodfood CEO Jonathan Ferrari said regarding the subscriber growth, “We are thrilled with our continued growth achieved on a significantly larger member base.”

Ferrari adds that it confirms Goodfood’s leadership in the market and strong status among Canadian consumers. Besides the encouraging subscriber growth, reported net income and positive EBITDA for two consecutive quarters. The company’s cash balance stood at $106.9 million at year-end.

Customer-centric initiatives

Management cites the significant increase in gross profit and active subscribers’ revenues as the reasons for the record fiscal year. It was Goodfood’s first full year of positive adjusted EBITDA. The growth estimate next year is around 137.5%.

The company is capitalizing on evolving consumer behaviors and seizing the moment. Canadians are starting to embrace shopping for groceries online. Among Goodfood’s key customer-centric initiatives are Goodfood WOW (same-day delivery) and Goodcourier (improved last-mile delivery).

Top growth stock for 2021

Goodfood Market is a screaming buy for growth investors. If you’re looking for an extraordinary growth opportunity and massive returns in 2021, this stock is the top pick. The way the company is rapidly accelerating, analysts are recommending a buy rating. Pretty soon, Goodfood Market will rule the e-commerce grocery and meal solutions industry.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Goodfood Market.

More on Coronavirus

A airplane sits on a runway.

3 Things to Know About Air Canada Stock Before You Buy

Air Canada stock continues to hover below $20 despite the sharp rise in travel demand seen across the industry. What's…

Read more »

tech and analysis
Stocks for Beginners

If You Invested $1,000 in WELL Health in 2019, Here is What It’s Worth Now

WELL stock (TSX:WELL) has fallen pretty dramatically from all-time highs, but what if you bought just before the rise? Should…

Read more »

Hand arranging wood block stacking as step stair with arrow up.

2 Pandemic Stocks That Are Still Rising, and 1 Offering a Major Deal

There are some pandemic stocks that crashed and burned, while others have made a massive comeback. And this one stock…

Read more »

Dad and son having fun outdoor. Healthy living concept
Dividend Stocks

1 Growth Stock Down 15.8% to Buy Right Now

A growth stock is well-positioned to resume its upward momentum in 2024 following its strong financial results and business momentum.

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Stocks for Beginners

3 Things About Couche-Tard Stock Every Smart Investor Knows

Couche-tard stock (TSX:ATD) may be up 30% this year, but look at the leadership and history of the stock to…

Read more »

Plane on runway, aircraft

Can Air Canada Double in 5 Years? Here’s What it Would Take

Air Canada (TSX:AC) stock has gone nowhere since 2020. Can this change?

Read more »

Senior housing
Stocks for Beginners

Home Improvement Stocks Are Set to Fall (When They Do, Buy These Like Crazy!)

Home improvement stocks are due to drop further in the coming months. But with solid underpinnings for the sector, it…

Read more »

An airplane on a runway

Forget Boeing: Buy This Magnificent Airline Stock Instead

Boeing (NYSE:BA) stock is looking risky right now, but Air Canada (TSX:AC) stock? Much less so.

Read more »