Mission Produce Inc. (NASDAQ: AVO) will release its Q3 2021 earnings in Monday September 13, 2021, after market close.
What to look for
In the last quarter, the company topped consensus revenue estimates thanks to increase in avocado volume despite average selling price dropping 14% YoY. The company had a solid quarter. For the current quarter, the company's blue-chip consumer based and network flexibility will continue allowing the company to distribute more volume relative to Q3 2020 and contribute to revenue growth.
Earnings: Stockearning’s Estimated EPS is expected to improve from the last quarter’s $0.12 per share. Historical earnings per share performance show that in the last 12 quarters, the company has topped earnings three times (100%). In Q2 2021, the company reported earnings of $0.12 compared to estimates of $0.09 per share.
Revenue: In Q2 2021, the company reported revenue of $234.7 million which is a 6% YoY increase as avocado volume increased 22%. Net income in Q2 was $7.4 million or $0.1 per diluted share, and adjusted net income was $8.7 million or $0.12 per diluted share. For fiscal Q3 2021, the company expects revenue of around $250.04 million. Mission Produce anticipates revenue of $90-$920 million assuming annual volume of between 670 million and 680 million.
Stock movement: Since the last earnings release, the company's stock has lost 7.8%. Following earnings release, the stock price was UP two times over the last two quarters. So historical price reaction suggests that there is a 100% chance for the stock price to be UP when the company releases Q3 2021 results. According to Stockearning’s algorithm predicts first day move after earnings release of 2% while the predicted move on the seventh day following earnings release is 3%.
What analysts are saying
JPMorgan analysts Thomas Palmer recently downgraded the company’s stock from “Buy” to “Hold” but increased the price target from $19 to $22. Palmer is optimistic on the long term growth of the avocado sector and Mission Produce’s position in the market. Interestingly, the analyst doesn’t see much upside on the stock to permit a constructive rating given its recent rally. Also, Palmer cited risks to fiscal 2021 due to a slow start to Q2 profitability and avocado prices which although they have improved they are still down YoY.
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