Last Updated: 14 Sep 2024
Executive Summary
Mission Produce Inc. (AVO) is a leading global avocado producer and distributor. The company has a strong financial position with a market capitalization of $934.6 million and an EBITDA of $77.7 million. AVO's trailing price-to-earnings (PE) ratio of 39.94 is in line with industry peers, while its forward PE of 45.45 indicates potential for growth. The stock's beta of 0.473 suggests low volatility compared to the broader market.
Company Overview
Mission Produce is headquartered in Oxnard, California and has operations in the United States, Mexico, Peru, Chile, and the Netherlands. The company sources avocados from over 30 countries and distributes them to over 25 countries worldwide. AVO's primary business segments include:
Fresh Avocados
Processed Avocado Products
Avocado Oil
Fundamental Analysis
AVO's financial performance has been strong in recent quarters. In the latest quarter ended July 31, 2024, the company reported revenue growth of 23.9% year-over-year to $1.138 billion. Diluted EPS increased by 88.9% to $0.33. The company's gross profit margin of 8.0% and operating margin of 5.2% are both above industry averages.
Mission Produce has a strong balance sheet with $264.5 million in cash and cash equivalents and $150.4 million in total debt. The company's return on assets (ROA) of 2.91% and return on equity (ROE) of 5.05% are both within industry norms.
Technical Analysis
AVO's stock price has been trending higher in recent months. The stock has broken above its 50-day and 200-day moving averages, indicating a bullish trend. The relative strength index (RSI) is currently at 58.6, suggesting that the stock is slightly overbought but still within a healthy range.
Short Term Outlook
In the short term, AVO's stock price is likely to continue to trend higher. The company's strong financial performance and positive technical indicators suggest that the stock is undervalued. The analyst target price of $15.5 represents a potential upside of 17.7% from the current price of $13.18.
Long Term Outlook
Mission Produce's long-term outlook is positive. The global avocado market is expected to continue to grow in the coming years, driven by increasing demand for healthy fats and the expansion of the millennial generation. AVO is well-positioned to capitalize on this growth with its strong brand presence and global distribution network.
Analyst Recommendations
Two analysts have rated AVO as a "Buy" in the past 3 months. The average analyst target price is $15.5, implying a potential upside of 17.7% from the current price.
