Financial Performance - Total revenue for Q1 fiscal 2025 increased by $75.5 million or 29% to $334.2 million compared to the same period last year, driven by a 25% increase in average per-unit avocado selling prices and a 5% increase in avocado volumes sold [4]. - Net income for Q1 fiscal 2025 was $3.9 million, or $0.05 per diluted share, compared to breakeven for the same period last year, attributed to lower interest rates and increased equity income [7]. - Adjusted net income for Q1 fiscal 2025 was $7.1 million, or $0.10 per diluted share, compared to $6.7 million, or $0.09 per diluted share, for the same period last year [8]. - Adjusted EBITDA for Q1 fiscal 2025 decreased by 8% to $17.7 million, compared to $19.2 million in the prior year, primarily due to lower per-unit gross margins on fruit sold [8]. - The company reported a net income of $6.2 million for Q1 2025, significantly higher than $2.0 million in Q1 2024 [43]. - Adjusted EBITDA for the three months ended January 31, 2025, was $17.7 million, down from $19.2 million in the same period of 2024, a decrease of 7.8% [43]. Sales and Revenue Growth - Marketing & Distribution segment net sales increased by $71.2 million or 32% to $295.8 million for Q1, driven by avocado pricing and volume dynamics [9]. - International Farming segment sales increased by $3.4 million or 59% to $9.2 million, primarily due to higher blueberry packing service revenue [11]. - Blueberries segment net sales increased by 12% to $36.4 million for Q1, driven by volume growth despite lower selling prices [13]. - Total segment sales increased to $341.4 million in Q1 2025 from $262.9 million in Q1 2024, marking a 30% growth year-over-year [48]. - Avocado sales reached $279.2 million in Q1 2025, up from $212.3 million in Q1 2024, reflecting a 31.5% increase [50]. - The average sales price per pound of avocados rose to $1.75 in Q1 2025, compared to $1.40 in Q1 2024, indicating a 25% increase [49]. Assets and Liabilities - Total current assets increased to $297.2 million as of January 31, 2025, from $279.0 million as of October 31, 2024 [29]. - Total assets reached $997.8 million as of January 31, 2025, compared to $971.5 million as of October 31, 2024 [29]. - Total liabilities increased to $414.9 million as of January 31, 2025, from $394.4 million as of October 31, 2024 [29]. - Cash and cash equivalents were $40.1 million as of January 31, 2025, down from $58.0 million as of October 31, 2024 [15]. - Cash and cash equivalents decreased to $40.1 million as of January 31, 2025, from $58.0 million as of October 31, 2024 [29]. - The company experienced an increase in accounts payable to $47.6 million as of January 31, 2025, compared to $35.3 million as of October 31, 2024 [29]. Future Outlook - For Q2 fiscal 2025, pricing is expected to be higher by approximately 5% compared to the $1.59 per pound average in Q2 fiscal 2024, indicating continued strength in demand [24]. - Total capital expenditures for fiscal 2025 are expected to remain in the range of $50 to $55 million [24]. - The company plans to continue focusing on market expansion and new product development to drive future growth [30]. Operational Cash Flow - The company reported a net cash used in operating activities of $1.2 million for the three months ended January 31, 2025, compared to net cash provided of $9.5 million in the same period of 2024 [33]. - International Farming adjusted EBITDA improved to $1.8 million in Q1 2025 from a loss of $0.5 million in Q1 2024 [43]. - Marketing and Distribution adjusted EBITDA decreased to $9.7 million in Q1 2025 from $11.0 million in Q1 2024, a decline of 11.8% [43].

Financial Performance - Net sales increased by $75.5 million or 29% to $334.2 million for the three months ended January 31, 2025, compared to $258.7 million in the same period last year, primarily driven by a 25% increase in average per-unit avocado sales prices and a 5% increase in avocado volume sold [82]. - Gross profit rose by $2.8 million or 10% to $31.5 million, with a gross profit margin of 9.4%, down from 11.1% in the prior year, impacted by lower per-unit margins on avocados due to supply challenges [88]. - Total net sales for the three months ended January 31, 2025, were $334.2 million, an increase of $75.5 million or 29% compared to $258.7 million in the same period last year [104]. - Net income for the three months ended January 31, 2025, was $6.2 million, up from $2.0 million in the same period last year, representing a 210% increase [113]. Segment Performance - The Marketing & Distribution segment generated net sales of $295.8 million, up from $224.6 million, while the Blueberries segment saw a revenue increase of $3.9 million or 12% [82]. - Marketing & Distribution segment net sales increased by $71.2 million or 32% to $295.8 million for the three months ended January 31, 2025, driven by avocado pricing and volume increases [106]. - International Farming segment adjusted EBITDA increased by $2.3 million or 460% to $2.3 million for the three months ended January 31, 2025, compared to a loss of $0.5 million in the same period last year [108]. - Blueberries segment net sales increased by $3.9 million or 12% to $36.4 million for the three months ended January 31, 2025, driven by blueberry volume and pricing dynamics [109]. Expenses and Income - Selling, general and administrative expenses increased by $1.5 million or 7% to $22.2 million, primarily due to higher employee-related costs [90]. - Interest expense decreased by $1.1 million or 33% to $2.2 million, attributed to lower average balances on the revolving line of credit and reduced interest rates [92]. - Equity method income increased by $0.4 million or 100% to $0.8 million, primarily due to improved margins on fruit sold at Mr. Avocado [94]. - Other income was $1.5 million, compared to an expense of $1.0 million in the prior year, driven by foreign currency transaction gains from a strengthening U.S. dollar [96]. - The provision for income taxes increased by $1.1 million or 52% to $3.2 million, reflecting higher income before taxes [100]. - The effective tax rate decreased to 34.0% from 51.2% in the prior year, influenced by book losses in certain jurisdictions [100]. Cash Flow and Capital Expenditures - Operating cash flows for the three months ended January 31, 2025, were negative at $1.2 million, compared to positive cash flows of $9.5 million in the same period last year, largely due to growth in working capital [113]. - Total purchases of property, plant, and equipment for the three months ended January 31, 2025, were $14.8 million, an increase from $9.9 million in the same period last year [114]. - For fiscal 2025, total capital expenditures are expected to be between $50 million to $55 million, including approximately $10 million carryover from fiscal 2024 [124]. - The capital expenditures will primarily focus on the International Farming and Blueberries segments, with significant investment in Guatemala for avocado orchard maintenance and packhouse construction [124]. Financial Position and Liabilities - As of January 31, 2025, cash and cash equivalents were $40.1 million, down from $58.0 million as of October 31, 2024 [121]. - The company maintained compliance with financial covenants, including a consolidated leverage ratio of not more than 3.5 to 1.00 as of January 31, 2025 [123]. - As of January 31, 2025, undiscounted cash liabilities related to leases were approximately $174.3 million, with $107.4 million allocated for long-term land leases in the International Farming and Blueberries segments [125]. - Remaining maturities on term loans as of January 31, 2025, were $118.2 million [126]. Accounting and Risk Disclosures - There have been no material changes to critical accounting estimates since the Annual Report on Form 10-K for the year ended October 31, 2024 [127]. - No material changes have occurred in the quantitative and qualitative disclosures about market risk since the Annual Report on Form 10-K for the year ended October 31, 2024 [128].

Core Insights - Mission Produce achieved record fiscal first quarter revenue of $334.2 million, a 29% increase year-over-year, driven by higher prices and volumes in the Marketing & Distribution segment [3][9] - The company reported net income of $3.9 million, or $0.05 per diluted share, compared to breakeven in the same period last year, reflecting improved operational performance despite industry challenges [6][9] - The Marketing & Distribution segment saw a 32% increase in net sales to $295.8 million, primarily due to a 25% rise in average per-unit avocado selling prices [10][9] Financial Overview - Total revenue for the first quarter increased by $75.5 million, or 29%, to $334.2 million compared to the same period last year [3][9] - Gross profit rose by $2.8 million to $31.5 million, with a gross profit percentage of 9.4%, down 170 basis points from the previous year [4][9] - Selling, general and administrative expenses increased by $1.5 million, or 7%, to $22.2 million, mainly due to higher employee-related costs [5][9] Segment Performance - The Marketing & Distribution segment's adjusted EBITDA decreased to $9.7 million from $11.0 million due to lower per-unit gross margins on avocados sold [10][9] - The International Farming segment's total sales increased by 59% to $9.2 million, driven by higher blueberry packing service revenue [12][9] - The Blueberries segment reported a 12% increase in net sales to $36.4 million, although adjusted EBITDA decreased by 29% to $6.2 million due to lower selling prices [14][15] Balance Sheet and Cash Flow - Cash and cash equivalents decreased to $40.1 million as of January 31, 2025, down from $58.0 million as of October 31, 2024 [16][9] - Net cash used in operating activities was $1.2 million, a decline from cash provided by operating activities of $9.5 million in the same period last year, primarily due to increased working capital [17][9] - Capital expenditures for the quarter were $14.8 million, up from $9.9 million in the prior year, focused on avocado orchard development and blueberry plant cultivation [18][9] Outlook - For the second quarter of fiscal year 2025, industry volumes are expected to be consistent with the prior year, with pricing projected to be approximately 5% higher compared to the same period last year [19][9]

Core Insights - The Zacks Rank system emphasizes earnings estimates and revisions to identify winning stocks, while also considering trends in value, growth, and momentum [1] - Value investing remains a popular strategy, focusing on fundamental analysis to find undervalued stocks [2] Company Analysis: Mission Produce (AVO) - Mission Produce (AVO) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong interest from investors [3] - AVO has a PEG ratio of 1.24, which is lower than the industry average of 1.37, suggesting it may be undervalued relative to its expected earnings growth [4] - The stock's P/S ratio stands at 0.67, compared to the industry's average of 0.69, reinforcing the notion that AVO is likely undervalued [5] - Overall, AVO's strong earnings outlook and key valuation metrics indicate it is an impressive value stock at the moment [6]

Company Overview - Mission Produce, Inc. (NASDAQ: AVO) is an international, vertically integrated avocado company that operates in a relatively unknown small-cap stock segment [1] - The company benefits from both short-term and long-term tailwinds, particularly due to Mexico being the largest avocado producer worldwide and the U.S. being a significant market for avocados [1] Investment Potential - The article highlights the potential for Mission Produce as a strongly undervalued stock, suggesting that there are investment opportunities that may be overlooked [1] - The author emphasizes a focus on discovering little-known, forgotten, and underrated stocks across various geographies and sectors [1]

Core Viewpoint - Mission Produce, Inc. is set to release its financial results for the fiscal first quarter ended January 31, 2025, on March 10, 2025, after market close [1] Group 1: Financial Results Announcement - The financial results will be discussed in a conference call and webcast at 5:00 PM Eastern Time on the same day [1] - The conference call can be accessed via phone or through a live audio webcast on the Company's Investor Relations website [2][3] Group 2: Company Overview - Mission Produce is a global leader in the avocado business, also offering mangos and blueberries [4] - The company has been sourcing, producing, and distributing fresh Hass avocados since 1983 and serves customers in over 25 countries [4] - Mission Produce operates four advanced packing facilities in key growing locations, including California, Mexico, and Peru, and has sourcing capabilities in multiple countries [4] - The company's distribution network includes strategically positioned centers across North America, China, Europe, and the UK, providing value-added services [4]

Core Viewpoint - Mission Produce, Inc. (AVO) has experienced a notable decline in stock performance, attributed to various challenges including climate risks and potential margin squeezes due to normalization in avocado prices [1][2][5]. Financial Performance - AVO's stock has decreased by 13.4% over the past three months, underperforming its industry peers and the broader Consumer Staples sector [5][6]. - The current share price of $11.74 reflects a 23% premium over its 52-week low of $9.54, but a 23% discount from its 52-week high of $107.43 [9]. - For fiscal 2024, AVO expects revenue to exceed $320 million, up from $257.9 million in the previous year, with adjusted EBITDA projected to surpass $28 million compared to $17.3 million [17]. Valuation Metrics - AVO is trading at a forward 12-month P/E multiple of 34.24X, significantly higher than the industry average of 13.87X and the S&P 500's average of 22.54X [10]. - Despite the high valuation, it is below its five-year high of 58.58X, indicating potential upside [10]. Growth Potential - AVO has shown a 15.7% increase in the past year, driven by rising avocado demand, expansion in emerging markets, and supply-chain efficiency [13]. - The company's competitive advantage lies in its global sourcing network and integrated operations, which enhance profitability [14][15]. Market Outlook - The Zacks Consensus Estimate indicates a decline in sales and EPS for fiscal 2024, with expected year-over-year declines of 14.5% and 43.2%, respectively, but a slight recovery is anticipated in fiscal 2025 with growth estimates of 4.4% and 2.4% [18]. - Despite recent stock performance concerns, AVO's strong market position and operational execution suggest favorable long-term prospects [20][21].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Mission Produce (AVO) as a strong candidate for value investors due to its favorable metrics and strong earnings outlook [2][3][6] Company Analysis - Mission Produce (AVO) currently holds a Zacks Rank of 1 (Strong Buy) and an A grade for Value, indicating it is among the highest-quality value stocks available [3] - AVO has a PEG ratio of 1.24, which is lower than the industry average of 1.36, suggesting it may be undervalued compared to its peers [4] - The stock's PEG ratio has fluctuated between a high of 1.54 and a low of 1.22 over the past year, with a median of 1.37 [4] - AVO's P/S ratio stands at 0.65, which is also lower than the industry's average P/S of 0.71, reinforcing the notion of undervaluation [5] - The combination of these metrics indicates that AVO is likely undervalued and stands out as one of the strongest value stocks in the market [6]

Core Viewpoint - The current earnings season emphasizes the importance of cash flow over profits, as cash flow reflects a company's true financial health and ability to sustain operations during market volatility [1][2]. Group 1: Importance of Cash Flow - Cash flow is crucial for a company's flexibility in decision-making, investment opportunities, and overall growth [2]. - Positive cash flow indicates an increase in liquid assets, enabling a company to meet obligations, reinvest, and return wealth to shareholders [4]. - A company must not only have positive cash flow but also increasing cash flow to ensure future growth and reduce reliance on external financing [5]. Group 2: Screening Parameters for Stocks - Stocks were screened for those with cash flow in the latest quarter at least equal to the 5-year average cash flow per common share, indicating a positive trend [6]. - Additional criteria included a Zacks Rank of 1 (Strong Buy), an average broker rating of 1, a current price of at least $5, and a VGM Score of B or better [7]. Group 3: Selected Stocks - **Suzano S.A. (SUZ)**: A major producer of eucalyptus pulp and paper, with a Zacks Consensus Estimate for 2025 earnings implying a year-over-year growth of 395.3% and a VGM Score of A [8]. - **Photronics, Inc. (PLAB)**: A leading manufacturer of photomasks, with a fiscal 2025 earnings estimate increased by 4.5% to $2.30 per share and a VGM Score of A [10]. - **Mission Produce, Inc. (AVO)**: Specializes in avocados, with a fiscal 2025 earnings estimate improved by 44.8% and a VGM Score of A [11]. - **Euroseas Ltd. (ESEA)**: Operates in the shipping market, with a current-year earnings estimate increased by 9.4% and a VGM Score of B [12].

Core Insights - The article emphasizes the importance of value investing as a successful strategy across various market conditions, focusing on fundamental analysis and traditional valuation metrics to identify undervalued stocks [2]. Company Analysis - Mission Produce (AVO) is highlighted as a strong candidate for value investors, currently holding a Zacks Rank of 1 (Strong Buy) and an "A" grade in the Value category [3]. - AVO has a PEG ratio of 1.24, which is slightly below the industry average of 1.29, indicating a favorable valuation relative to its expected earnings growth [4]. - The company has a P/S ratio of 0.69, compared to the industry's average P/S of 0.7, suggesting that AVO is also undervalued based on sales performance [5]. - Overall, AVO's strong earnings outlook and key valuation metrics indicate that it is likely undervalued at the moment, making it an attractive option for value investors [6].