I think OFRM is still being priced like a clean premium growth story, when the core business looks a lot weaker under the surface. The company’s whole pitch is that it can keep expanding distribution, sell more premium organic baby/kids food, and eventually get operating leverage. The issue is that a lot of the growth looks like door expansion and shelf-fill, while actual product velocity seems to be getting worse. As they move beyond Whole Foods / Target / higher-income stores, they’re pushing a very expensive product into customers who are much less likely to pay $2.50–$4.00 for a pouch when Gerber, GoGoSqueeZ, Target private label, etc. are way cheaper.
The bigger problem is the unit economics. OFRM gets marketed like an asset-light, high-margin brand, but that “asset-light” structure also means they outsource production and rely on refrigerated distribution, co-manufacturers, slotting fees, coolers, trade spend, and a short shelf-life supply chain. That makes the EBITDA inflection story pretty hard to believe. If costs have already scaled roughly with revenue for years, I don’t see why the market should suddenly assume major margin expansion just because revenue grows.
The setup also matters. This IPO looked more like a balance sheet cleanup than a true growth inflection. They came public with debt, cash burn, and proceeds already tied up in obligations. Then you have a lockup expiration coming in August 2026, with a huge portion of shares becoming eligible for sale and several VC holders who likely want liquidity. So you have potentially disappointing fundamentals and a big supply event hitting around the same window.
At $16.77, I think the market is still giving OFRM too much credit for TAM, margins, and category expansion. My view is that the stock should trade closer to a lower-growth CPG name once investors realize the growth is lower quality and the margin story is weak. The deck’s price target is $7.35, which sounds aggressive at first, but the logic is basically: slower revenue growth + limited operating leverage + lockup pressure = a much lower multiple. Not financial advice, but I think this is one of the cleaner small-cap short setups right now.