iFabric Corp.'s (TSE:IFA) Stock is Soaring But Financials Seem Inconsistent: Will The Uptrend Continue?

iFabric Corp. (TSE:IFA) has been making waves in the apparel manufacturing sector with its recent stock performance, but a closer look at the company's financials reveals a more nuanced picture. The company, which designs and distributes women's intimate apparel and accessories, has seen its stock price soar in recent months. However, the underlying financial metrics tell a different story, raising questions about the sustainability of this uptrend.



iFabric's stock has been on a tear, with a year-to-date price performance of 5.45% as of April 2, 2025. The company's market capitalization stands at C$35.15 million, and its stock has a 50-day moving average price of C$1.12 and a 200-day moving average price of C$1.10. These metrics suggest a strong upward trend, but a deeper dive into the company's financials paints a more complex picture.

One of the key financial metrics to consider is iFabric's Return on Capital Employed (ROCE). As of the trailing twelve months to December 2024, iFabric's ROCE was 8.0%, which is lower than the Luxury industry average of 12%. While this may seem concerning, it's important to note that iFabric's ROCE has improved significantly from generating losses five years ago. The company is now employing 149% more capital than previously, indicating that there are plenty of opportunities to invest capital internally and at ever higher rates.

Another important metric to consider is iFabric's revenue growth. The company reported record revenues and strong profitability for Q4 and the full fiscal year 2024. Specifically, iFabric achieved a 55% revenue growth in Q4 2024 compared to the same period in 2023, driven by new apparel programs. For the fiscal year 2024, iFabric’s revenues were nearly on par with 2023 despite a shorter reporting period, and the company anticipates continued double-digit sales growth in 2025 with the introduction of new product categories.

However, despite these impressive revenue figures, iFabric's net income for the full year 2024 was CA$1.63 million, a significant improvement from a CA$1.69 million loss in FY 2023. The profit margin for FY 2024 was 6.0%, up from a net loss in FY 2023. The earnings per share (EPS) for FY 2024 was CA$0.054, compared to a CA$0.056 loss in FY 2023. These metrics suggest that while iFabric is making progress, there is still room for improvement in terms of profitability.

One of the key factors contributing to iFabric's recent revenue growth is the company's investment in the BlueCherry ERP system. This strategic move, announced on March 17, 2025, is designed to accelerate growth and realize operational efficiencies. The company's selection of this cutting-edge system indicates a commitment to leveraging technology to drive performance and efficiency.

In conclusion, while iFabric Corp.'s stock performance has been impressive, the underlying financial metrics tell a more nuanced story. The company's ROCE is improving, but it still lags behind industry benchmarks. iFabric's revenue growth is impressive, but profitability remains a challenge. The company's investment in the BlueCherry ERP system is a positive development, but it remains to be seen whether this will be enough to sustain the uptrend in iFabric's stock price. Investors should approach iFabric with caution, as the company's financials suggest that the recent stock performance may not be sustainable in the long term.