Mission Produce Falls Below 50 & 200-Day SMAs: Is It Still a Buy?

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$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].