Shares of Calavo Growers (CVGW, Financial) dropped sharply by 6.08% today, with the stock trading at $22.69. This decline was primarily driven by disappointing fourth-quarter results, where the company's EBITDA and gross margin fell short of expectations, affected by increased fruit costs and higher compensation expenses.
Despite the disappointing earnings performance, Calavo Growers' revenue surpassed expectations, even though sales were lower than the previous year. This mixed result highlights the challenges the company faces in managing its cost structure amid a challenging economic environment.
From a valuation perspective, Calavo Growers is currently seen as "Modestly Overvalued" with a GF Value estimate of $19.84. For further analysis, you can visit the GF Value page. The company's price-to-book (P/B) ratio stands at 1.98, indicating that the stock is priced close to its book value.
Calavo Growers operates within the Consumer Defensive sector, specifically in the Retail - Defensive industry. The company has a market capitalization of approximately $403.92 million, with a free cash flow per share of $1.20 and a dividend yield near its one-year high at 2.65%.
The financial indicators also present a mixed picture. While Calavo Growers has a strong Altman Z-Score of 4.57, indicating financial strength, it has experienced a long-term decline in gross margin with an average annual rate of decline at 10.7%. Moreover, the company's Return on Invested Capital (ROIC) is less than its Weighted Average Cost of Capital (WACC), raising concerns about capital efficiency.
Looking forward, investors should closely monitor Calavo Growers' ability to manage costs and sustain revenue growth, as these factors will be critical to enhancing profitability and stabilizing its financial outlook.
