Mama's Creations: Five Straight Earnings Beats — and Less Operating Income Than Two Years Ago

There is one number that works on investors like a seal of quality: the earnings surprise. A company reports more than analysts had estimated — and the mind immediately draws a conclusion the number does not support: the business is doing better than expected. Psychologists call it the anchoring trap. The anchor is the estimate, not the business. Beat a too-low anchor five times in a row and you have beaten the estimate five times — without having earned a single dollar more. That is why Mama's Creations, Inc. (Nasdaq: MAMA) sits at number 19 in our Big Earnings Surprise ranking (U.S. selection, 81 hits, as of July 25, 2026). Before the seal of quality does its work, let us make a deal: we read the filings with the U.S. securities regulator, the SEC, together — the annual report (Form 10-K) for the year ended January 31, 2026, the quarterly report (Form 10-Q) for the quarter ended April 30, 2026, and the current reports through early July 2026. There is a second set of numbers in there. And it says something different.

What Mama's Creations actually does — the deli counter, not the shelf

Mama's Creations is based in East Rutherford, New Jersey, employs 581 full-time and one part-time worker (as of January 31, 2026, none covered by collective bargaining agreements) and makes what sits behind the glass of the American supermarket deli counter: beef, chicken and turkey meatballs, meat loaf, sausage products, pasta and rice entrees, plus olives and savory items from its Olive Branch business. More than 100 products, sold in over 12,000 stores — grocery, mass, club and convenience — and into the channel the company itself calls "deli": hot bars, salad bars, prepared meals, sandwiches and the grab-and-go case.

It is a down-to-earth business with a charming origin story. Anna "Mama" Mancini emigrated from Bari to Bay Ridge, Brooklyn in 1921; her grandson Dan Dougherty turned her recipes into MamaMancini's LLC in 2010, which went public through a merger in 2013 and traded under the symbol MMMB. The recipes still do not belong to the company: a development and license agreement dated January 1, 2009 grants it a 50-year exclusive license with a 25-year extension option — subject to certain minimum payments to Dougherty. In 2023 MamaMancini's Holdings, Inc. became Mama's Creations, Inc., and MMMB became MAMA. Anyone looking for price or metric series from before 2023 will find them under the old name — a point where databases routinely diverge.

Growth has come largely through acquisitions: T&L Creative Salads and Olive Branch in 2021 for a combined $14 million, the sales and development firm Chef Inspirational Foods in 2022 and 2023, and on September 2, 2025, the assets of Crown I Enterprises — an indirect subsidiary of the distributor Sysco — for $17.5 million in cash, $17.3 million after the purchase price adjustment. Which brings us to the central tension of this analysis, running through every chapter that follows: earnings beat the estimate every quarter — but they are not growing. What is growing is the number of shares splitting them.

Where the stock landed on our desk

We run roughly 3,500 stocks through our scanners every day. As of July 25, 2026, Mama's Creations appears at number 19 in the Big Earnings Surprise ranking (U.S. selection, 81 hits), at a relative strength of 88 — stronger, in other words, than 88 percent of all other stocks. To reproduce it: open the scanner, set the country filter to "US," and read down the list, which is sorted by relative strength. The condition behind this scanner is strict and easy to check: reported earnings per share must have come in at least 20 percent above the analyst estimate in each of the last four completed quarters. At Mama's Creations it is five quarters running: up 50 percent for the quarter ended April 30, 2025, up 100 percent (July 31, 2025), up 400 percent (October 31, 2025), up 71.6 percent (January 31, 2026) and up 66.7 percent (April 30, 2026).

The logic behind the scanner is sound: a company that beats expectations this clearly and this consistently is being systematically underestimated — the estimates are lagging the business. But the scanner measures exactly that: the distance to the estimate. And that distance can be large even when the earnings themselves stay small. Take one example from that very list: the 400 percent jump in the quarter ended October 31, 2025 happened because analysts had modeled a loss of one cent per share and got three cents of profit. A four-cent difference. On roughly 40 million shares, that is about $1.6 million. Remember the principle: an earnings surprise measures the expectation, not the result. The lists are recomputed daily — the rank and relative strength cited here are as of July 25, 2026.

The numbers across the years — first, what genuinely impresses

Let us start with what is good, because there is plenty of it. Revenue has grown at double-digit rates for years: $103.3 million in fiscal 2024, $123.3 million in fiscal 2025, $171.7 million in fiscal 2026 — up 66.3 percent in two years. In the first quarter of the current fiscal year (ended April 30, 2026) revenue was $52.8 million against $35.3 million in the prior-year quarter, a gain of 49.7 percent. And unlike many growth stories, there is a real profit underneath: $5.3 million of net income in fiscal 2026, and $2.1 million in the first quarter of fiscal 2027 alone, after $1.2 million a year earlier.

The balance sheet has improved too. Stockholders' equity rose from $24.9 million (January 31, 2025) to $52.6 million (January 31, 2026) and $55.4 million (April 30, 2026). Cash grew from $7.2 million to $24.4 million. The $5.5 million revolving line of credit was undrawn at both dates; bank debt on April 30, 2026 amounted to only about $5.3 million under the so-called Crown Note, which matures on October 1, 2030. The financial covenants of the M&T Bank credit agreement — a fixed charge coverage ratio of at least 1.25 times, total funded debt of no more than 3.75 times EBITDA — were met on April 30, 2026 and on January 31, 2026. Operating cash flow was $11.4 million in fiscal 2026 against capital expenditure of only $1.7 million, leaving free cash flow of roughly $9.8 million.

One more point deserves a fair hearing. In the fiscal year ended January 31, 2025, management had disclosed three material weaknesses in internal control — inadequate segregation of duties between IT and accounting, missing support for authorizations and approvals, and inadequate documentation of review procedures. In the annual report for the year ended January 31, 2026 they are reported as remediated, management concludes internal control was effective, and the auditor UHY LLP has issued its own attestation report on it. That is not a given, and it belongs on the credit side of the ledger.

Uncomfortable truth no. 1: two thirds more revenue — one fifth less operating income

Now the other side. Line up the same three fiscal years and a picture emerges that contradicts the earnings-surprise streak. Operating income fell from $8.890 million in fiscal 2024 through $4.877 million in fiscal 2025 to $7.112 million in fiscal 2026 — despite 66.3 percent more revenue, that is a decline of 20.0 percent against the starting year. Net income went from $6.561 million to $5.286 million over the same span, and diluted earnings per share from $0.17 to $0.13.

The cause is not overhead. Operating expenses stood at 20.9 percent of revenue in fiscal 2026 and 20.8 percent in fiscal 2024 — essentially unchanged. The entire loss sits in cost of sales: gross margin slid from 29.4 percent to 24.8 percent and 25.1 percent. The annual report attributes this to higher labor, freight and fuel costs weighing on profitability, and states that the company seeks to offset rising costs through efficiencies and price increases, though pricing actions may lag changes in supply and commodity costs. Earning $7.1 million on $171.7 million of revenue means one thing: a little over four cents of every dollar sold survives to the operating line. For a food manufacturer that is not unusual — but it is also not a business that carries valuation fantasy.

Uncomfortable truth no. 2: a good part of the growth was bought — and the company shows it itself

On September 2, 2025, the subsidiary Crown 1 Foods, Inc. acquired substantially all of the assets of Crown I Enterprises, Inc., an indirect subsidiary of Sysco Corporation, in an asset deal for $17.5 million in cash. Crown 1 is a certified full-service manufacturer of value-added proteins and ready-to-heat meals. The purchase was funded through an acquisition line at M&T Bank, from which the company first drew $19 million on August 28, 2025; part of that was repaid out of the September 2025 private placement and the remainder converted into a five-year term note on October 1, 2025.

What the acquisition delivered is set out in the notes to the annual report — along with what it cost:

"The Company's Consolidated Statements of Operations includes $23.2 million of revenue and $1.7 million of net income attributable to Crown 1 from the acquisition date through January 31, 2026."

— Mama's Creations, Inc., Form 10-K for the year ended January 31, 2026, Note 3 (Acquisition)

The same note contains the figure that turns the growth picture around: the pro forma table. It shows what revenue and earnings would have been had Crown 1 been part of the group from February 1, 2023 — a like-for-like comparison, prepared by the company itself. In everyday terms: instead of comparing a car with a car plus trailer, you compare car plus trailer twice. The result: $205.5 million of revenue for fiscal 2026 instead of $171.7 million, and before that $177.6 million instead of $123.3 million and $160.4 million instead of $103.3 million. That turns 66.3 percent of two-year growth into 28.1 percent. On earnings: pro forma net income of $6.1 million in fiscal 2026 — after $3.7 million (2025) and $8.1 million (2024).

Fairness demands the counterpoint: the business did grow organically as well. Strip the $23.2 million of Crown revenue out of fiscal 2026 and roughly $148.5 million remains against $123.3 million a year earlier — a good 20 percent on its own steam. That is respectable. It is simply not the picture painted by the reported figure of 39.2 percent.

Uncomfortable truth no. 3: $100 million of new stock at $18 — on tangible book value of $1.06

And now the event that recasts everything above. On June 29, 2026, Mama's Creations entered into an underwriting agreement with William Blair and D.A. Davidson:

"On June 29, 2026, Mama's Creations, Inc. … entered into an underwriting agreement … agreeing, subject to customary conditions, to issue and sell in a public offering 5,555,556 shares … of the Company's common stock … at a price to the public of $18.00 per share (the 'Offering'). … The Offering was completed on July 1, 2026."

— Mama's Creations, Inc., Form 8-K dated July 1, 2026, Item 1.01

Convert that into orders of magnitude. Gross proceeds were $100.0 million; after $0.90 per share in underwriting discounts — $5.0 million in total, close to the entire net income of fiscal 2026 — and further expenses, roughly $94.0 million remained. For comparison: total assets on April 30, 2026 stood at $87.5 million. In two days the company raised more money than it had assets on its books, and about eight times its annual operating cash flow.

For what? The prospectus supplement and the current report say it verbatim: for "working capital and general corporate purposes." Part of the money may go toward acquisitions, though the company currently has no agreements or commitments with respect to any such transaction. For investors that means $94 million with no stated use, deployed at management's broad discretion — which the prospectus supplement itself lists as the first risk factor of the offering.

The second half of the arithmetic is the harder one. Dilution, in everyday terms, means your slice of the cake gets smaller because more guests are at the table. How much smaller, the company calculates itself in the prospectus supplement:

"Our net tangible book value at April 30, 2026 was approximately $43.3 million, or $1.06 per share. … This represents an immediate increase in net tangible book value of $1.90 per share to our existing stockholders and an immediate dilution to purchasers in net tangible book value of $15.03 per share to new investors."

— Mama's Creations, Inc., Form 424B5 prospectus supplement dated June 30, 2026, "Dilution"

Translated: the offering price was seventeen times tangible book value per share. Anyone subscribing at $18.00 bought $2.97 of substance and $15.03 of expectation per share. For existing holders, tangible book value rose by $1.90 to $2.97 — while their share of earnings and votes shrank in return. And one more figure belongs beside it: in September 2025, ten months earlier, the same company had sold 2,666,667 shares at $7.50 in a private placement. Shares outstanding went from 37,596,000 (January 31, 2025) to 46,497,291 after the July 1, 2026 closing — up 23.7 percent in seventeen months. An over-allotment option covering a further 833,333 shares runs for 30 days from June 29, 2026; the $94.0 million net proceeds figure does not include it.

The capital story does not end there. As of April 30, 2026 the company also had outstanding: 71,306 options (weighted-average exercise price $7.36), 501,948 shares under restricted stock units, up to 3,844,890 shares tied to market and performance goals — that is the maximum award level — and 4,626,987 shares reserved under the 2021 incentive plan. Together roughly 9.0 million shares, or 22 percent of the 40.7 million then outstanding. The quarterly report already works with 43.3 million diluted shares against 40.7 million outstanding.

Uncomfortable truth no. 4: one customer, 39 percent

A company producing for the deli counter does not sell to millions of consumers but to a handful of buyers. The notes to the quarterly report spell out how tight that is:

"For the three months ended April 30, 2026, one customer accounted for approximately 39% of gross revenue. For the three months ended April 30, 2025, two customers accounted for approximately 36% and 27% of gross revenue, respectively."

— Mama's Creations, Inc., Form 10-Q for the quarter ended April 30, 2026, Note 8 (Concentrations)

Across the years the concentration moves, but it never disappears: three customers at 26, 11 and 10 percent in fiscal 2024, one customer at 44 percent in fiscal 2025, two customers at 38 and 17 percent in fiscal 2026. The receivables side tells the same story: on April 30, 2026, 27 percent of gross outstanding receivables sat with a single buyer. Anyone familiar with the profit mechanics of American grocery retail knows which side holds the longer lever in those conversations. At a gross margin of roughly a quarter, every pricing round costs real substance — and a lost listing would no longer be a margin problem but a revenue problem.

What the stock costs — orders of magnitude, not daily prices

As of July 25, 2026, market capitalization stood at roughly $824.9 million, spread across 46,497,291 shares. A cross-check from the filings for context: the prospectus supplement cites $19.94 (June 26, 2026) as the last reported sale price before the offering, and the shares were issued at $18.00. The market capitalization is therefore sound. Put into ratios, it looks like this:

• Price-to-earnings: roughly 156 times fiscal 2026 net income ($5.3 million); roughly 135 times the four quarters through April 30, 2026 (about $6.1 million). For comparison, the broad U.S. market has traded in the 20 to 25 times range for years.
• Price-to-sales: roughly 4.8 times fiscal 2026 revenue ($171.7 million), roughly 4.0 times the pro forma base ($205.5 million). For a food manufacturer running a little over four percent operating margin, that is a lot.
• Free cash flow: roughly $9.8 million remained after capital expenditure in fiscal 2026 — about 84 times that figure in market capitalization.
• Book value: stockholders' equity was $55.4 million on April 30, 2026; add the $94.0 million of net proceeds and you arrive at roughly $149 million on paper — still leaving market capitalization at more than five times that. Tangible substance, net of goodwill and intangibles, comes to only $137.3 million, or $2.97 per share on the pro forma basis given in the prospectus supplement.

The professionals take a friendlier view: four analysts cover the stock — two at the top rating, two at buy, not a single hold or sell — with an average price target of $22.43 (data as of July 25, 2026). That is about 25 percent above the price at which the company itself sold shares. On the other side of the ledger, 3,174,627 shares were sold short at the same date, or 7.8 percent of the float. There is a dissenting view. Anyone trying to place valuations like this in the small-cap consumer world will find a pattern of the same kind in our analysis of Sweetgreen: a good story, a thin profit and a price that has long since taken both for granted.

Opportunities and risks at a glance

What speaks for the company:

• A real, profitable business with manageable debt: $5.3 million of net income in fiscal 2026, only about $5.3 million of bank debt on April 30, 2026, an undrawn revolver and covenants comfortably met.
• Revenue also grows organically: roughly 20 percent in fiscal 2026 once the Crown contribution is stripped out.
• In the first quarter of fiscal 2027 the operating margin improved from 4.5 to 5.0 percent despite the weaker gross margin — overhead is growing more slowly than revenue.
• After the offering, roughly $118 million in cash is available on paper — enough for the next acquisition without new debt.
• The material weaknesses in internal control disclosed in 2025 have been remediated and attested by the auditor.

What speaks against it:

• Operating income sits below its fiscal 2024 level despite two thirds more revenue; gross margin fell from 29.4 percent to 23.6 percent most recently.
• A substantial share of the growth was bought — the company's own pro forma table cuts two-year growth from 66.3 percent to 28.1 percent.
• Valuation: roughly 135 times the earnings of the last four quarters and roughly 4.8 times annual revenue.
• Dilution: shares outstanding up 23.7 percent in seventeen months, plus roughly 9.0 million potential shares from compensation programs as of April 30, 2026.
• Customer concentration: one buyer at 39 percent of gross revenue in the quarter ended April 30, 2026.
• $94 million of proceeds with no stated use; Crown 1 integration is still under way, and its internal control was excluded from the effectiveness assessment in the first year.

A human bottom line

Back to where we started, to the anchoring trap. Five consecutive quarters above the estimate is a fine streak, and it is what carried this stock into our ranking. But the streak is a story about analysts aiming too low, not about a company earning more. Operating income at Mama's Creations was lower in fiscal 2026 than in fiscal 2024, even though revenue rose by two thirds. And while expectations were being beaten quarter after quarter, the company sold stock twice — at $7.50 in September 2025 and at $18.00 in June 2026.

You can read that generously: management using its share price to fill the treasury and fund acquisitions without debt is acting in the company's interest. You can also read it the other way: raising $94 million without saying what it is for means selling an expectation — and the price obtained was seventeen times tangible substance. Both readings sit in the same filings, and both are documented. In the end it is like the deli counter itself: what is on the plate, you can see. Who paid for the plate and who eats from it is in the fine print. What you make of that is your decision. And that is exactly as it should be.

Sources

• Form 10-Q for the quarter ended April 30, 2026 (filed June 8, 2026) — balance sheet, statements of operations and cash flows, Note 7 (loan agreements), Note 8 (concentrations), Note 9 (stockholders' equity, options, performance stock units), Note 13 (segment), MD&A
• Form 10-K for the year ended January 31, 2026 (filed April 14, 2026) — business description, human capital, risk factors, Item 9A (internal control), Note 3 (Crown 1 acquisition and pro forma table), Note 7 (related parties), Note 8 (credit agreement), Note 9 (concentrations)
• Form 10-K for the year ended January 31, 2025 (filed April 8, 2025) — comparative figures, original disclosure of the material weaknesses
• Form 8-K dated July 1, 2026 — Item 1.01 (underwriting agreement, 5,555,556 shares at $18.00), Item 8.01 (updated risk factors on Crown 1 integration)
• Form 424B5 prospectus supplement dated June 30, 2026 — offering terms, shares outstanding before the offering, "Dilution," use of proceeds, underwriting syndicate
• Form 8-K dated September 2, 2025 — Crown 1 purchase agreement, M&T Bank credit facility, private placement of 2,666,667 shares at $7.50
• Form 8-K dated July 7, 2026 — Item 5.07, voting results of the annual meeting held July 2, 2026
• Fundamental data: market capitalization, analyst consensus, short interest, 52-week range, quarterly earnings surprises (data as of July 25, 2026)
• Our in-house stock scanner: Big Earnings Surprise, rank 19 of 81 U.S. hits, relative strength 88 (as of July 25, 2026); the lists are recomputed daily

This analysis is journalistic commentary on publicly available documents. It is not investment advice and not a solicitation to buy or sell securities. Stocks can lose substantial value, up to and including the total loss of the capital invested. All figures come from the SEC filings named above and from fundamental data retrieved as of the dates stated; they may have changed since. The author holds no position in Mama's Creations, Inc. at the time of publication.