The grocery aisles are filling with premium baby and kid snacks as parents increasingly seek organic, no-additive foods. Millennials and Gen Z consumers are driving a shift to “better-for-you” products, and niche children’s brands are benefitting.
Berkeley-based Once Upon a Farm (OFRM) exactly seized on this trend, going public this week. Co-founded by actress Jennifer Garner and former Annie’s CEO John Foraker, the company sells fresh, cold-pressed purees and refrigerated meals with no added sugar or preservatives for babies through school-age children. Its recent IPO offered 11 million shares at $18 apiece, raising about $198 million and valuing the company around $724 million. The stock opened near $21 on debut, about 17% above the offer, and briefly spiked to $21.70, before now hitting around $25, reflecting robust investor appetite. Now the question on investors’ minds: does the upside justify buying OFRM at this stage?
About OFRM Stock
Once Upon a Farm is a public benefit organic food company focusing on young children’s nutrition. It pioneered cold-pressed pouch purees and now also offers frozen meals, refrigerated oat bars, and dry snacks, all made with high-quality organic ingredients and no added sugar. The brand is widely distributed, with products in major retailers like Target (TGT) and Walmart (WMT). Management touts it as the “#1 growth brand” in its category, leveraging celebrity co-founder Garner’s visibility and a mission-driven identity. Its public benefit status means it emphasizes social and environmental goals alongside profit, which appeals to some investors but also means extra reporting.
The IPO price was $18, and the stock began trading around $21. It briefly ran up 20% on day one, with an intraday high of $21.73, and closed about 16 to 17% above the offering price. Since then, as of now, it has traded roughly between $20 and $25. With only days of history, the stock’s tiny float means volatility is high, but early performance shows strong initial demand. There were no significant pullbacks or news-driven swings yet.
From a valuation perspective, on any fundamental metric, OFRM looks expensive, but comparisons are tricky for a loss-making start-up. Its price/sales ratio is about 3.7x, far above the 0.8x median for food industry peers. By contrast, P/S or EV/revenue for larger packaged food companies is typically in the low 2x range. In short, investors are paying a premium for future growth. Whether that premium is justified depends on execution: the lofty valuation leaves little room for a miss on growth or margins.
IPO Launch and Impact
The IPO was one of the highest-profile consumer deals of early 2026. Backers like Goldman Sachs and J.P. Morgan ran the sale, signaling institutional support. Management has been upbeat. In media interviews, CEO Foraker noted that the $198 million raised “gives us access to capital” to invest in supply-chain upgrades and marketing and called the listing a “marker of credibility” to help the brand “lead our categories.” The fresh capital will certainly bolster the balance sheet, enabling growth initiatives and possibly debt reduction. But it also puts the company under public scrutiny.
Any hiccup, such as rising ingredient costs, tariff pressures, or slower distribution gains, could quickly pressure this richly valued stock. In effect, the IPO jump reflects optimism about capturing a large kids food market, but it also sets high expectations for near-term progress.
Strong Sales Momentum, Yet Rising Losses
Once Upon a Farm’s growth story is real, but profitability remains elusive. For the nine months ended Sept. 30, 2025, the company reported roughly $176.7 million in revenue, up 64% from $107.6 million a year prior.
In the latest quarter, Q3 2025, sales were $66 million, a 58% year-over-year (YoY) jump. This robust top-line growth reflects expanded retail distribution and new product launches, e.g., frozen kid meals, refrigerated oat bars, and smoothies. Management estimates its addressable U.S. kids food market at about $79 billion, highlighting ample runway.
Despite higher sales, losses have deepened. Net loss in Q3 was $11.3 million, widening from about $7 million a year earlier, and the nine-month net loss ballooned to $39.8 million. The increased spending is partly deliberate, as marketing, innovation, and infrastructure costs have ramped up. Adjusted EBITDA in Q3 was only a small negative, roughly -$0.7 million, suggesting high operating leverage, but the company remains well in the red.
Cash flow is also a concern for the company. In Q3, free cash flow was about -$7.6 million, and operating cash burn was around -$6.1 million. At quarter-end, the company had only about $7.4 million in cash on hand against roughly $148 million of long-term debt. The IPO proceeds will significantly boost cash; pre-IPO, the balance sheet was thin. Without the new capital, management had noted that continued investment requires outside financing. The big debt load, mostly a note due 2030, means OFRM needs to generate positive cash or seek refinancing eventually.
In interviews, Foraker and the CFO's comments stressed aggressive expansion of product lines and marketing rather than a focus on near-term profit guidance. For example, in late January, the company announced a high-profile partnership with children’s retailer Carter’s: a limited-edition kids’ apparel and pajamas collection featuring fruit and veggie prints bundled with Once Upon a Farm snack variety packs. This collaboration, which includes a joint $20,000 donation to Save the Children, is aimed at raising brand awareness among new parents.
The Bottom Line on OFRM Stock
Once Upon a Farm's IPO has put the business on investors' radar, and it is not difficult to see why. The company is expanding rapidly, has good gross margins, and is in a business that has long-term demand wind. Nonetheless, the financials are also characterized by major losses and ongoing cash burn, and thus execution is critical in the coming quarters.
OFRM shares are trading at a premium to sales, which means that investors are already speculating on fast scaling and enhanced profitability. To the shareholders, headlines will not be as important as the subsequent earnings reports. The valuation can be fair if revenue growth continues to accelerate and management is reducing losses. Otherwise, OFRM stock could not live up to the initial excitement.
For now, Once Upon a Farm is a high-risk, high-reward growth story, rather than a no-brainer acquisition. Patient investors would be willing to sit on the margins until the company proves that it is capable of transforming the fast growth into a sustainable business.
On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
- Google Gemini Is Just Getting More Popular. Does That Make GOOGL Stock a Buy Here?
- Should You Buy the Post-Earnings Dip in Amazon Stock?
- As Kyndryl Stock Plunges Into Deeply Oversold Territory, Should You Buy the Dip?
- Nvidia Reportedly Faces Gaming GPU Delays: Does That Weaken the Bull Case for NVDA Stock Here?
