VFF Stock Doubles in 6 Months: Why Investors Are Paying Attention

Village Farms International (VFF) has become a standout performer recently, with shares climbing 154.8% over the past six months—a sharp contrast to the broader market’s 13.1% gain and the industry’s 7.9% decline. This outperformance raises a natural question: what’s driving the momentum, and is there still opportunity at current valuations?

The Numbers Tell an Interesting Story

VFF’s recent gains significantly outpace comparable names in the space. While Tilray Brands (TLRY) and Mission Produce (AVO) returned 58.8% and 1.3% respectively, and Scotts Miracle-Gro (SMG) fell 5%, VFF’s trajectory stands apart. The strength reflects a meaningful shift in investor confidence, supported by tangible improvements in operational execution and financial stability.

What’s Actually Changed Under the Hood?

The catalyst for VFF’s resurgence lies in demonstrable improvements at Pure Sunfarms, the company’s core Canadian cannabis subsidiary. In Q3 FY2025, the unit delivered notably stronger results: higher revenue, compressed margins, and disciplined cost discipline in an increasingly competitive landscape. This efficiency gains particularly stood out, as most cannabis operators continue battling pricing headwinds.

VFF’s competitive advantage rests on its cost structure. The company operates large-scale greenhouse assets with low-cost cultivation models—a structural moat that’s helping protect profitability even as industry pricing remains under pressure. Beyond Canada, international medical cannabis exports (particularly into Europe) and the Netherlands operations contributed to revenue diversification and growth.

The company also maintains a long-term play in U.S. hemp-derived cannabinoids through Balanced Health Botanicals, though regulatory clarity remains elusive in this segment.

Here’s Where the Valuation Gets Interesting

Even after the 154.8% run-up, VFF doesn’t look stretched on metrics. The stock trades at 1.57x price-to-sales—below the industry average of 2.11x. This suggests the market is still pricing in meaningful execution and regulatory risks. Peer comparisons illustrate the point: AVO trades at 0.69x PS, SMG at 1.07x, and TLRY at 1.22x. VFF’s premium appears justified by its recent operational improvement, yet room exists for multiple expansion if momentum sustains.

The Risks Worth Monitoring

Cannabis pricing pressure in Canada remains persistent due to intense competition and retail fragmentation. While VFF’s cost advantage provides some cushion, prolonged pressure could compress near-term results. U.S. regulatory uncertainty—particularly around hemp-derived cannabinoids—adds another layer of complexity. Additionally, input cost inflation could test management’s ability to maintain margin discipline going forward.

Analyst Consensus: Holding Steady

Interestingly, analyst EPS estimates for Village Farms have remained essentially flat over the past 60 days for both current and next fiscal year—suggesting expectations remain stable even as the stock has rallied significantly. This disconnect between price appreciation and unchanged estimates could signal either undervalued catalysts ahead or that current gains have already priced in the improvement story.

The Bottom Line on VFF

Village Farms has genuinely improved its operational foundation: better execution, stronger cash generation, and a more diversified revenue base. The Canadian cannabis market remains structurally challenged, but VFF’s low-cost model and international expansion efforts are meaningful competitive differentiators.

At current valuations and with earnings estimates unchanged, VFF presents a more balanced opportunity than it did months ago—less of a momentum play and more of a fundamentals story. The risk-reward looks reasonable for investors comfortable with cannabis sector volatility and regulatory uncertainty. VFF currently carries a Zacks Rank #3 (Hold).