Mama’s Creations (NYSE: MAMA) has been cooking up some serious growth in the prepared foods industry.
This small-cap gem manufactures and markets fresh deli products, found in over 8,000 grocery and convenience stores across the U.S. From meatballs to chicken dishes, Mama’s Creations is aiming to become a one-stop shop for deli offerings.
The stock’s recent performance has been as hot as its meatballs.
Over the past year, MAMA shares have surged from around $1.50 to over $7.50 – a mouthwatering 400% gain. This meteoric rise reflects the company’s strong execution and growing investor appetite for its growth story.
But after such a substantial run-up, is this fast-growing food company’s valuation as tasty as its products? Let’s run it through The Value Meter and find out…
At first glance, Mama’s Creations’ enterprise value-to-net asset value (EV/NAV) ratio of 14.43 might look a bit rich. It’s about 42% higher than the average of 10.16 for companies with positive net assets.
Even so, the company has churned out positive free cash flow in each of the past four quarters. On average, it’s generating cash at a rate of 16.34% of its net assets.
That’s more than double the 7.88% average for firms with similarly consistent cash flow. This indicates Mama’s Creations is squeezing a lot more value out of its assets than its peers.
Mama’s recent financial results underscore this strength. For their Q1 2025, the company reported a 29% year-over-year revenue increase to $29.8 million. This robust growth was driven by enhanced distribution, strong club store rotations, and accelerated sales velocities from targeted promotions.
The company’s strategy of cross-selling new products into its existing customer base is also paying off. Mama’s Creations has grown its average number of items carried per store from below 5 to over 7 in less than two years. This expansion of shelf space bodes well for future growth.
Management isn’t resting on its laurels either. Mama’s Creations is investing in automation and efficiency improvements to offset commodity cost pressures and boost margins. The company is also expanding its product lineup, recently introducing breakfast wraps, retail-ready chicken breasts, and gourmet paninis.
When we balance Mama’s Creations’ slightly premium valuation against its superior cash generation, strong revenue growth, and expanding product portfolio, the stock looks more attractive than its EV/NAV ratio alone would suggest.
The Value Meter rates Mama’s Creations as “Slightly Undervalued.” While not a screaming bargain, the company’s impressive growth trajectory and cash flow generation make it worth drooling over.
What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.
