Core Viewpoint - Zacks Investment Research has initiated coverage of Natural Alternatives International, Inc. (NAII) with a "Neutral" recommendation, indicating a balanced perspective on the company's growth potential and execution challenges [1] Company Overview - Founded in 1980 and headquartered in Vista, CA, Natural Alternatives is a global manufacturer and marketer of nutritional supplements and proprietary ingredients [2] - The company has expanded its production capacity by over 44% since fiscal 2023, positioning itself for scalable growth and improved operating leverage [2] Financial Performance - NAII's fiscal 2025 net sales increased by 14% year over year to $129.9 million, driven by a 16% growth in private-label manufacturing [4] - The company maintains a diversified customer base, with international sales accounting for 39% of total revenues [4] - NAII reported a fiscal 2025 net loss of $13.6 million, which widened from the previous year due to underutilized capacity and inflationary costs [7] Growth Drivers - The addition of a high-volume powder facility enhances NAII's ability to meet the growing demand for powder-based supplements and meal replacements [3] - The company's competitive advantage is bolstered by proprietary formulations protected by 17 global patents and 57 trademarks, which may lead to licensing revenue growth [5] - The U.S. dietary supplement market is projected to grow from $64.4 billion in 2023 to $80 billion by 2027, positioning NAII's product portfolio favorably [6] Valuation Metrics - NAII shares have gained 8.7% over the past six months but have fallen 40.6% year over year, underperforming the broader market [8] - The stock trades at 0.03X trailing 12-month EV/Sales and 2.77X EV/EBITDA, both below sector and industry averages, indicating muted investor expectations [8]