Local Bounti Corporation (LOCL) | Investment Case

1. Company Snapshot

1.a. Company Description

Local Bounti Corporation grows fresh greens and herbs in the United States.It produces lettuce, herbs, and loose-leaf lettuce.The company sells its products to food retailers and food service distributors.

Local Bounti Corporation was founded in 2018 and is headquartered in Hamilton, Montana.

Show Full description

1.b. Last Insights on LOCL

Local Bounti Corporation's recent performance was driven by several positive factors. The company's Q2 2025 earnings report showed a narrower loss per share ($1.63) compared to the same period last year ($3), and revenue grew 28% year-over-year, driven by expanded facility operations and strengthened retail relationships. Additionally, the company achieved $7 million in annualized expense reductions and secured $10 million through a convertible note with an existing investor. A recent rating upgrade to Buy by Zacks, citing growing optimism about earnings prospects, further supports the company's positive momentum.

1.c. Company Highlights

Last Price	2.34
Change Percentage	-0.43%
Open	2.34
Previous Close	2.35
Market Cap ( Millions)	52
Volume	165
Year High	5.75
Year Low	1.18
M A 50	2.76
M A 200	2.56

FCF Yield	-91.82%
Dividend Yield	0.00%
ROE	96.71%
Debt / Equity	-0.20%
Net Debt / EBIDTA	10.18%
Price To Book	-332.66
Price Earnings Ratio	-431.42
Price To FCF	-1.09
Price To sales	1.13
EV / EBITDA	-0.8

2. Local Bounti's Q3 2025 Earnings: A Turning Point in CEA

Local Bounti reported a revenue of $12.2 million for Q3 2025, representing a 19% year-over-year growth. The adjusted gross margin percentage stood at approximately 29%. However, the company's EPS came out at -$1.18, missing estimates of -$0.65. The adjusted EBITDA loss was $7.2 million, an improvement from $8.4 million in Q3 of last year.

Publication Date: Nov -25

                                    📋 Highlights
                                    Revenue Growth::
                                                Q3 revenue rose to $12.2 million, reflecting 19% year-over-year growth.
EBITDA Improvement::
                                                Adjusted EBITDA loss narrowed to $7.2 million, down from $8.4 million in Q3 2024.
Cost Reduction::
                                                Annualized cost savings of $8 million achieved through operational optimizations.
Market Expansion::
                                                Launched 10-ounce Romano Caesar salad kits in 89 Walmart stores in the Pacific Northwest.
Margin Progress::
                                                Adjusted gross margin reached 29%, driven by yield improvements and automation in Texas and Georgia.

                                

Operational Highlights

The company's operational momentum was evident in the Texas automated harvesting system now being operational, and the Georgia Tower upgrades driving yield improvements. According to Kathleen Valiasek, "Q3 represents a foundational quarter for the company, with critical infrastructure investments completed, commercial traction demonstrated, and cost structure improvements made."

Commercial Progress and Future Outlook

Local Bounti has made significant commercial progress, driven by new product launches such as family-sized salad kits and private label partnerships, which carry more attractive margin profiles. The company has also expanded its distribution with Walmart. With Texas operating at full capacity and cost initiatives reaching full run rate, the company expects an improved adjusted EBITDA performance in Q4.

Valuation and Growth Expectations

Analysts estimate next year's revenue growth at 82.6%. The current P/S Ratio of 1.14 may indicate that the stock is fairly valued in terms of revenue. However, the EV/EBITDA ratio of -0.8 suggests that the company's enterprise value is not far from its EBITDA, which could be a positive sign. The ROE of 96.71% is unusually high, but this is likely due to the company's negative equity. The Net Debt / EBITDA ratio of 0.1 indicates a manageable debt burden.

Key Takeaways

Local Bounti has demonstrated operational momentum and commercial progress, with a clear focus on improving unit economics and reducing costs. While the EPS miss was significant, the company's guidance for improved adjusted EBITDA performance in Q4 is a positive sign. Investors will be watching closely to see if the company can deliver on its growth expectations.

3. NewsRoom

Local Bounti (NYSE:LOCL) & Scotts Miracle-Gro (NYSE:SMG) Head-To-Head Comparison

Nov -30

Source: defenseworld.net

CHS (NASDAQ:CHSCP) & Local Bounti (NYSE:LOCL) Head to Head Review

Nov -22

Source: defenseworld.net

Local Bounti Corporation (LOCL) Q3 2025 Earnings Call Prepared Remarks Transcript

Nov -12

Source: seekingalpha.com

Local Bounti Announces Third Quarter 2025 Financial Results

Nov -12

Source: prnewswire.com

Local Bounti to Release Third Quarter 2025 Financial Results on Wednesday, November 12, 2025

Nov -10

Source: prnewswire.com

All You Need to Know About Local Bounti (LOCL) Rating Upgrade to Buy

Sep -17

Source: zacks.com

Local Bounti Corporation (LOCL) Q2 2025 Earnings Call Transcript

Aug -13

Source: seekingalpha.com

Local Bounti Corporation (LOCL) Reports Q2 Loss, Misses Revenue Estimates

Aug -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.50%)

6. Segments

Lettuce, Herbs and Loose Leaf Lettuce

Expected Growth: 10.5%

Growing demand for locally sourced and sustainable produce, increasing health awareness, and rising popularity of plant-based diets drive the growth of the fresh greens market, with Local Bounti Corporation's locally grown and sustainably sourced lettuce, herbs, and loose leaf lettuce well-positioned to capitalize on this trend.

7. Detailed Products

Locally Grown Produce

Fresh, locally grown produce, including leafy greens, herbs, and microgreens, grown using sustainable and environmentally friendly practices.

Living Lettuce

Fresh, living lettuce grown using hydroponic methods, with a longer shelf life and reduced waste.

Herbs and Microgreens

Fresh, locally grown herbs and microgreens, including basil, cilantro, and arugula, perfect for adding flavor and nutrition to any dish.

Value-Added Products

Pre-washed, pre-cut, and ready-to-use produce products, including salad mixes and slaws, perfect for convenience and time-saving.

Private Label and Co-Packing

Customized, private label produce products and co-packing services for food manufacturers and retailers.

8. Local Bounti Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Local Bounti Corporation faces moderate threat from substitutes as consumers have limited alternatives for fresh produce, but some substitutes like frozen or canned goods exist.

Bargaining Power Of Customers

Local Bounti Corporation has a diverse customer base, reducing the bargaining power of individual customers, and the company's strong brand reputation also limits customer bargaining power.

Bargaining Power Of Suppliers

Local Bounti Corporation has a moderate level of dependence on suppliers, but the company's scale and vertical integration reduce supplier bargaining power.

Threat Of New Entrants

Local Bounti Corporation operates in a capital-intensive industry with high barriers to entry, making it difficult for new entrants to compete effectively.

Intensity Of Rivalry

Local Bounti Corporation operates in a highly competitive industry with many established players, leading to intense rivalry and competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	94.79%
Debt Cost	7.86%
Equity Weight	5.21%
Equity Cost	16.81%
WACC	8.33%
Leverage	1820.74%

11. Quality Control: Local Bounti Corporation passed 2 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

CHS

A-Score: 6.2/10

Value: 6.2

Growth: 3.7

Quality: 3.6

Yield: 10.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

Limoneira

A-Score: 4.9/10

Value: 8.4

Growth: 6.0

Quality: 4.9

Yield: 4.0

Momentum: 0.0

Volatility: 6.3

1-Year Total Return ->

Vital Farms

A-Score: 4.9/10

Value: 4.5

Growth: 9.6

Quality: 6.6

Yield: 0.0

Momentum: 5.0

Volatility: 3.7

1-Year Total Return ->

Alico

A-Score: 4.5/10

Value: 5.0

Growth: 0.9

Quality: 2.0

Yield: 3.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

Local Bounti

A-Score: 4.1/10

Value: 9.4

Growth: 4.2

Quality: 5.1

Yield: 0.0

Momentum: 5.5

Volatility: 0.3

1-Year Total Return ->

S&W Seed

A-Score: 2.4/10

Value: 10.0

Growth: 2.0

Quality: 2.2

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

16.75%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.33%

Local Bounti Corporation - US53960E2054

1. Company Snapshot

1.a. Company Description

Local Bounti Corporation grows fresh greens and herbs in the United States.It produces lettuce, herbs, and loose-leaf lettuce.The company sells its products to food retailers and food service distributors.Local Bounti Corporation was founded in 2018 and is headquartered in Hamilton, Montana.

1.b. Last Insights on LOCL

1.c. Company Highlights

More Volatile

Cheaper

Lower Quality

Earnings Miss

Revenues Miss

Average Yield

Earnings Beats

Strong Momentum

Lower Growth

Revenues Beats

Weak Momentum

Lower Yield

2. Local Bounti's Q3 2025 Earnings: A Turning Point in CEA

Operational Highlights

Commercial Progress and Future Outlook

Valuation and Growth Expectations

Key Takeaways

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.50%)

6. Segments

Lettuce, Herbs and Loose Leaf Lettuce

Expected Growth: 10.5%

7. Detailed Products

Locally Grown Produce

Living Lettuce

Herbs and Microgreens

Value-Added Products

Private Label and Co-Packing

8. Local Bounti Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Local Bounti Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.34$

Current Price

2.34$

Potential

-0.00%

Expected Cash-Flows

Local Bounti Corporation grows fresh greens and herbs in the United States.It produces lettuce, herbs, and loose-leaf lettuce.The company sells its products to food retailers and food service distributors.

Local Bounti Corporation was founded in 2018 and is headquartered in Hamilton, Montana.

12.e Scoring ^Insights

12.f DCF ^BETA