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1. Company Snapshot

1.a. Company Description

Mission Produce, Inc.engages in sourcing, producing, packaging, and distributing avocados in the United States and internationally.The company operates through two segments, Marketing and Distribution, and International Farming.


It also provides value-added services, including ripening, bagging, custom packing, and logistical management.The company serves retail, wholesale, and foodservice customers.The company was founded in 1983 and is headquartered in Oxnard, California.

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1.b. Last Insights on AVO

Mission Produce's recent performance is driven by several positive factors. The company's Q4 earnings beat, with international farming sales soaring 97% year-over-year, lifted adjusted EBITDA. Margin discipline and per-unit efficiency have given the company an edge in navigating volatile avocado markets. Additionally, insider buying activity is a positive indicator, with major shareholder Holdings Venture Globalharvest purchasing $178,234 worth of shares on December 24th and $159,223.56 worth on December 26th. A proposed merger with Calavo Growers, Inc. could also bring opportunities, with Mission shareholders expected to own approximately 80.3% of the combined company.

1.c. Company Highlights

2. Mission Produce's Fiscal 2025 Earnings: A Strong Performance Amidst Transition

Mission Produce reported a robust financial performance for fiscal 2025, with record revenue reaching $1.39 billion, driven by a 7% volume growth in avocados sold. The company's adjusted EBITDA also saw a significant increase, with a 12% rise. Earnings per share (EPS) came in at $0.31, beating estimates of $0.23. The strong cash generation is evident, with $88.6 million in operating cash flow, and a reduction in long-term debt by approximately $18 million. The company's financial performance is a testament to its ability to execute on a global stage, leveraging its integrated platform to drive the best possible outcomes for customers and maximize value.

Publication Date: Dec -20

📋 Highlights
  • Leadership Transition:: Steve Barnard transitions to Executive Chairman, succeeded as CEO by John Pawlowski, who led record $1.39 billion revenue and 7% avocado volume growth.
  • Financial Performance:: 12% adjusted EBITDA increase, $88.6 million operating cash flow, and $18 million reduction in long-term debt in Q4 FY2025.
  • Avocado Market Share:: 7% volume growth in avocados sold, with industry-wide 2026 volume expected to rise 10% despite 25% price decline from $1.75/lb (2025).
  • Mango Expansion:: Achieved 5.2% market share with 150 bps full-year growth, driven by consumer engagement and supply consistency strategies.
  • Capital Allocation:: Targeting $40 million in FY2026 capex ($20 million for growth) and prioritizing market share gains, global expansion, and potential share buybacks.

Business Segment Performance

The company's commercial team demonstrated remarkable agility in managing demand and supply shifts across its U.S. and European operations. The blueberry strategy focused on filling in the seasonal calendar and maximizing the productivity of its Peruvian assets. The mango business also saw significant growth, with a 5.2% market share and a 150 basis point increase in market share for the full year. John Pawlowski highlighted the importance of consumer engagement and supply consistency, which is setting the stage for stronger growth in the future.

Outlook and Guidance

The company expects avocado industry volumes to increase by approximately 10% in 2026, driven by a larger Mexican crop in the current harvest season. However, pricing is expected to be lower year over year by approximately 25% compared to the $1.75 per pound average experienced in 2025. For blueberries, the company expects volume increases from its own farms as new acreage comes into production, which should translate to higher revenue as average sales prices are expected to be flat to slightly higher. Analysts estimate next year's revenue growth at -2.7%, indicating a challenging environment, but the company's diversified portfolio and strong operational performance are expected to mitigate this.

Valuation and Return Metrics

With a P/E Ratio of 24.97 and an EV/EBITDA of 8.33, the company's valuation appears reasonable, considering its strong financial performance and growth prospects. The company's return on invested capital (ROIC) stands at 5.36%, and return on equity (ROE) is 6.68%. The net debt to EBITDA ratio is -0.48, indicating a healthy balance sheet. The Free Cash Flow Yield is 3.99%, providing a decent return for investors. The company's priority is growth, and they are looking for opportunities to expand their existing categories, geographic reach, or bolt on adjacent ones, which could potentially drive further returns.

3. NewsRoom

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Mission Produce vs. Limoneira: Which Fresh Produce Stock Has an Edge?

Feb -11

Source: zacks.com

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Is Mission Produce Ready to Deliver on Global Sourcing Hopes?

Feb -09

Source: zacks.com

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Are Consumer Staples Stocks Lagging Mission Produce (AVO) This Year?

Feb -09

Source: zacks.com

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Record Sales, Rising Tariffs: Can AVO Keep the Growth Flowing?

Feb -04

Source: zacks.com

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Village Farms vs. Mission Produce: Which Produce Stock Looks Better?

Jan -28

Source: zacks.com

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Mission Produce's Revenues Up 10%: Start of a Multi-Segment Growth?

Jan -27

Source: zacks.com

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Market Today: Nvidia's $2B CoreWeave stake, gold at record

Jan -26

Source: gurufocus.com

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Is Mission Produce (AVO) Stock Outpacing Its Consumer Staples Peers This Year?

Jan -23

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.79%)

6. Segments

Marketing & Distribution

Expected Growth: 1.8%

Mission Produce's 1.8% growth in Marketing & Distribution is driven by increasing avocado demand, strategic partnerships, and expanded distribution channels. The company's ability to adapt to changing consumer preferences, invest in digital marketing, and optimize logistics has enabled it to capitalize on the growing demand for avocados, resulting in sustained growth.

Blueberries

Expected Growth: 1.5%

Mission Produce's blueberries growth is driven by increasing demand for healthy and convenient food options, expanding distribution channels, and strategic partnerships. The company's focus on sustainability, quality, and year-round supply also contributes to its 1.5% growth. Additionally, the rising popularity of plant-based diets and blueberries' perceived health benefits further support the segment's growth.

International Farming

Expected Growth: 2.2%

Mission Produce's 2.2% growth in international farming is driven by increasing global demand for avocados, strategic partnerships with local farmers, and expansion into new markets. Additionally, investments in technology and logistics have improved operational efficiency, enabling the company to capitalize on emerging trends in the fresh produce market.

7. Detailed Products

Avocados

Mission Produce, Inc. offers a wide range of avocado varieties, including Hass, Fuerte, and Lamb Hass, sourced from its own farms and partner growers.

Ripening and Distribution Services

The company provides ripening and distribution services to ensure that avocados are delivered to customers at the optimal ripeness and quality.

Avocado Oil

Mission Produce, Inc. offers high-quality avocado oil, extracted from ripe avocados, suitable for cooking, cosmetics, and pharmaceutical applications.

Avocado-Based Products

The company offers a range of avocado-based products, including frozen avocado, avocado puree, and avocado chunks, suitable for food manufacturing and foodservice industries.

8. Mission Produce, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Mission Produce, Inc. faces moderate threat from substitutes as consumers have limited alternatives for avocados, but other fruits and vegetables can be used as substitutes in some recipes.

Bargaining Power Of Customers

Mission Produce, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand and high-quality products make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Mission Produce, Inc. relies on a network of farmers and suppliers for its avocado supply. While the company has some bargaining power due to its large scale, suppliers can still negotiate prices and terms.

Threat Of New Entrants

Entering the avocado market requires significant investment in land, labor, and equipment. Mission Produce, Inc.'s established brand and distribution network create barriers to entry for new competitors.

Intensity Of Rivalry

The avocado market is highly competitive, with several large players competing for market share. Mission Produce, Inc. must continuously innovate and improve its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.41%
Debt Cost 3.95%
Equity Weight 66.59%
Equity Cost 6.49%
WACC 5.64%
Leverage 50.18%

11. Quality Control: Mission Produce, Inc. passed 3 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

Stock-Card
SpartanNash

A-Score: 5.9/10

Value: 7.5

Growth: 3.3

Quality: 2.1

Yield: 7.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Chefs Warehouse

A-Score: 5.3/10

Value: 3.4

Growth: 8.7

Quality: 5.1

Yield: 0.0

Momentum: 8.5

Volatility: 6.0

1-Year Total Return ->

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AMCON

A-Score: 4.6/10

Value: 7.0

Growth: 6.1

Quality: 2.2

Yield: 4.0

Momentum: 3.0

Volatility: 5.0

1-Year Total Return ->

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UNFI

A-Score: 4.4/10

Value: 7.3

Growth: 4.6

Quality: 1.9

Yield: 0.0

Momentum: 9.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Mission Produce

A-Score: 4.3/10

Value: 4.5

Growth: 5.9

Quality: 5.0

Yield: 0.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
HF Foods Group

A-Score: 3.2/10

Value: 9.7

Growth: 3.2

Quality: 3.2

Yield: 0.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.66$

Current Price

13.66$

Potential

-0.00%

Expected Cash-Flows