SunOpta has gotten torched over the last six months - since June 2025, its stock price has dropped 35.4% to $3.82 per share. This might have investors contemplating their next move.
Is now the time to buy SunOpta, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free for active Edge members.
Why Do We Think SunOpta Will Underperform?
Despite the more favorable entry price, we're cautious about SunOpta. Here are three reasons we avoid STKL and a stock we'd rather own.
1. Revenue Spiraling Downwards
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, SunOpta’s demand was weak and its revenue declined by 1.6% per year. This wasn’t a great result and signals it’s a low quality business.
2. Fewer Distribution Channels Limit its Ceiling
With $792.4 million in revenue over the past 12 months, SunOpta is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers.
3. Low Gross Margin Reveals Weak Structural Profitability
All else equal, we prefer higher gross margins because they make it easier to generate more operating profits and indicate that a company commands pricing power by offering more differentiated products.
SunOpta has bad unit economics for a consumer staples company, signaling it operates in a competitive market and lacks pricing power because its products can be substituted. As you can see below, it averaged a 15.4% gross margin over the last two years. That means SunOpta paid its suppliers a lot of money ($84.63 for every $100 in revenue) to run its business. 
Final Judgment
SunOpta doesn’t pass our quality test. Following the recent decline, the stock trades at 26.4× forward P/E (or $3.82 per share). This valuation tells us a lot of optimism is priced in - we think there are better stocks to buy right now. We’d recommend looking at a safe-and-steady industrials business benefiting from an upgrade cycle.
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