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Cal-maine Foods (CALM)
NASDAQ:CALM
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Cal-Maine Foods
(NASDAQ:CALM)
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Rating:73Outperform
Price Target:
$84.00
▲(6.23% Upside)
Strong financial quality (debt-free balance sheet and robust cash generation) and a very attractive valuation (low P/E and high yield) support the score. These positives are tempered by weak technical momentum and an earnings-call outlook that acknowledges near-term margin pressure and commodity/avian-flu risks despite solid long-term strategic progress.
Positive Factors
Debt-free balance sheet
A virtually debt-free balance sheet and large equity base provide durable financial flexibility to fund capex, acquisitions, buybacks and dividends without stressing liquidity. This reduces refinancing risk across cycles and supports strategic investments during industry downturns.
High-quality cash generation
Consistently strong operating and free cash flow, with FCF near 88% of reported earnings, indicates high earnings quality and internal funding capacity. Persistent cash generation supports reinvestment, shareholder returns and buffers cyclical volatility in commodity-driven margins.
Mix shift to specialty and prepared foods
A durable strategic shift toward specialty and prepared foods increases higher-margin, less price-sensitive revenue streams. Expanding specialty capacity and prepared foods scale can stabilize earnings over cycles, diversify customers, and improve predictability compared with commodity egg exposure.
Negative Factors
Commodity-driven revenue cyclicality
Revenue and profitability remain highly sensitive to volatile egg prices and volumes; large YoY swings have produced material top-line declines. This structural commodity exposure creates recurring earnings volatility and makes multi-period revenue predictability challenging for capital planning.
Ongoing avian influenza risk
Persistent HPAI outbreaks pose a structural operational risk: unpredictable flock losses, supply interruptions, and biosecurity costs can force capacity reductions and margin hits. This epidemiological uncertainty can materially alter production plans and long-term cost structures.
Prepared foods ramp and cost pressure
Rapid prepared-foods expansion requires execution of capacity builds and automation; transitional lower volumes and higher SG&A can persist. If scale efficiencies lag or integration costs run higher, margin dilution could be prolonged, pressuring the durability of the new revenue stream.
Cal-Maine Foods (CALM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.51B
Dividend Yield10.53%
Average Volume (3M)1.07M
Price to Earnings (P/E)3.1
Beta (1Y)0.34
Revenue Growth65.80%
EPS Growth197.95%
CountryUS
Employees2,929
SectorConsumer Defensive
Sector Strength42
IndustryAgricultural Farm Products
Share Statistics
EPS (TTM)2.13
Shares Outstanding47,654,045
10 Day Avg. Volume1,374,785
30 Day Avg. Volume1,066,975
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)1.83
Price to Sales (P/S)1.10
P/FCF Ratio4.38
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue0.86
Enterprise Value/Gross Profit2.06
Enterprise Value/Ebitda2.21
Forecast
1Y Price Target
$90.00Price Target Upside13.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)9.16
Revenue Forecast (FY)$3.25B
Cal-Maine Foods Business Overview & Revenue Model
Company DescriptionCal-Maine Foods, Inc., together with its subsidiaries, produces, grades, packages, markets, and distributes shell eggs. The company offers specialty shell eggs, such as nutritionally enhanced, cage free, organic, and brown eggs under the Egg-Land's Best, Land O' Lakes, Farmhouse Eggs, and 4-Grain brand names, as well as under private labels. It sells its products to various customers, including national and regional grocery store chains, club stores, independent supermarkets, foodservice distributors, and egg product consumers primarily in the southwestern, southeastern, mid-western, and mid-Atlantic regions of the United States. Cal-Maine Foods, Inc. was founded in 1957 and is headquartered in Ridgeland, Mississippi.
How the Company Makes MoneyCal-Maine Foods makes money primarily through the sale of shell eggs. The company's revenue model revolves around producing and distributing different types of eggs, such as conventional, cage-free, organic, and specialty eggs. Key revenue streams include sales to retail customers, such as grocery stores and supermarkets, and foodservice customers, including restaurants and institutional food providers. Cal-Maine Foods also benefits from strategic partnerships with major retail chains and distributors, which help in expanding its market reach. Additionally, factors such as egg prices, feed costs, and consumer demand significantly influence the company's earnings.
Cal-Maine Foods Key Performance Indicators (KPIs)
Any
Revenue By Product Category
Shows how much revenue each product category generates, highlighting which segments drive growth and profitability. This can indicate consumer preferences and the company's strategic focus areas.
Shows how much revenue each product category generates, highlighting which segments drive growth and profitability. This can indicate consumer preferences and the company's strategic focus areas.
Data provided by:
The Fly
The FlyCal-Maine Foods Earnings Call Summary
Earnings Call Date:Jan 07, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 31, 2026
Earnings Call Sentiment Neutral
Balanced outcome: the company demonstrated meaningful strategic progress — rapid growth in prepared foods (YoY), a clear mix shift toward specialty and value-added products, sizable capacity expansion plans, and a strong cash-rich, virtually debt-free balance sheet. However, near-term financial results show considerable revenue and profit compression driven by much lower commodity egg prices, margin pressure from prepared foods expansion work, higher SG&A, and persistent avian flu risk. Management presented a confident long-term thesis while acknowledging short-term headwinds and transitional costs.Q2-2026 Updates
Positive Updates
Diversification and Mix Shift Toward Specialty and Prepared Foods
Specialty eggs and prepared foods combined increased materially as a portion of net sales, representing approximately 42.8%–46.4% of net sales (company cited ranges across periods), up from ~31%–32% a year earlier — a clear mix shift away from pure commodity shell eggs toward higher-margin and more stable categories.
Prepared Foods Rapid Revenue Growth (Year-over-Year)
Prepared foods sales grew substantially year-over-year: Q2 FY2026 prepared foods sales were $71.7M vs $10.4M in Q2 FY2025 (+586.4%). YTD FY2026 prepared foods sales were $155.6M vs $19.4M in prior year (+702.9%). Echo Lake Foods contributed $56.6M in Q2 and $127.1M YTD.
Investments to Expand Prepared Foods Capacity
Announced ~$36M of CapEx for Echo Lake (including a $15M network optimization adding ~17M lbs scrambled egg production and a previously announced $14.8M high-speed pancake line adding ~12M lbs). Joint venture Trapini Foods to invest $7M through FY2028 adding ~18M lbs. Combined prepared foods capacity expected to increase >30% over the next 18–24 months.
Specialty Egg Capacity and M&A
Acquisition of Clean Egg LLC production assets in Texas expanded specialty cage-free and free-range capacity (described as ~677,000 brown cage-free/free-range layers and pullets) supporting local sourcing and specialty growth; specialty egg sales were essentially stable Q2 (down 0.4%) and up 4.7% YTD, showing resilience.
Strong Balance Sheet and Cash Position
Ended the quarter with $1.1B in cash and temporary cash investments (despite an 18.2% decline vs prior period), a virtually debt-free balance sheet, and $94.8M of operating cash flow in Q2 and $373.4M YTD (up 55.5% YTD), providing flexibility for capex, M&A and buybacks.
Share Repurchases and Dividend Return of Capital
Purchased 846,037 shares for $74.8M in the quarter under an existing repurchase program (up to $500M authorized; $375.2M remaining). Company announced an approximate cash dividend of $0.72 per share under its variable dividend policy.
Operational Growth Metrics (Flock & Hatchery)
Production capacity and future supply showed expansion: breeder flocks grew (Q2 +12.7%; YTD +21.6%), total chicks hatched rose (Q2 +65.1%; YTD +71%), and average layer hens expanded (Q2 +2.6%; YTD +6%), supporting future sales and percent produced of sales moving toward company target levels.
Management Confidence and Long-Term Strategy
Management emphasized structural changes (hybrid pricing, vertical integration, specialty and prepared foods growth) that they say make the company more durable vs prior cycles and better positioned to manage lower ag prices without forcing losses.
Negative Updates
Significant Revenue Decline (Quarter)
Q2 FY2026 net sales were $769.5M vs $954.7M a year earlier, a decline of 19.4%. Total shell egg sales in Q2 were $649.6M, down 28.1% (driven by 26.5% lower selling prices and 2.2% lower volumes). Conventional egg sales in Q2 declined 41.0% (38.8% lower selling prices and 3.6% lower volumes).
Material Profit Compression
Q2 gross profit fell to $207.4M (down 41.8% year-over-year). Operating income in Q2 was $123.9M, down 55.5% with an operating margin of 16.1%. Net income attributable to Cal-Maine in Q2 fell to $102.8M (down 53.1%) and diluted EPS was $2.13 (down 52.3%). YTD declines were also notable: gross profit down 14.0% YTD and net income down 18.1% YTD.
Prepared Foods Short-Term Volume and Margin Pressure
Management flagged temporary lower volume and higher costs at Echo Lake due to capacity optimization and automation work. Prepared foods experienced margin slippage (gross margin pull-down; management targets ~19% EBITDA but expects near-term transient slippage and Q3 additional pressure). Echo Lake saw sequential softness (Q2 prepared foods down ~14.5% vs the comparable internal period cited).
SG&A and Cost Increases
SG&A increased (Q2 +6.8%; YTD +9.2%) driven by the Echo Lake acquisition and higher professional/legal fees. Farm production, processing, packaging and warehousing costs rose, contributing to cost pressures even as some outside purchase costs declined.
Cash Balance Decline
Although cash remained strong, cash and temporary investments declined 18.2% to $1.1B versus the prior-year period, reflecting uses of cash (capex, acquisitions, buybacks, dividends).
Ongoing Avian Influenza Risk
Management stressed that high-path avian influenza (HPAI) remains an ongoing, global threat with continued outbreaks (company cited global outbreaks and sizable historical layer losses). The virus presence and unpredictability keep downside operational risk elevated.
Company Guidance
The company guided that its strategy centers on expanding specialty eggs and scaling prepared foods—targeting ~30% prepared foods volume growth over the next 18–24 months and a ~19% EBITDA margin for Echo Lake—funded by targeted CapEx and M&A: a $15.0M Echo Lake network optimization adding ~17M pounds of scrambled egg capacity by mid‑FY2027, a $14.8M high‑speed pancake line adding ~12M pounds by early FY2027, and a Trapini JV investing $7.0M through FY2028 to add ~18M pounds (combined prepared foods capacity +30%+ over 18–24 months); specialty capacity was increased via the Clean Egg asset purchase (≈677,000 specialty layers/pullets) with management saying specialty could comprise >50% of shell egg sales over time. Near‑term headwinds include temporary lower prepared‑foods volume and higher costs through the remainder of the fiscal year as projects ramp, but management emphasized a strong balance sheet (≈$1.1B cash/temporary investments, virtually debt‑free), continued buybacks (846,037 shares for $74.8M this quarter; $375.2M repurchase authorization remaining), and a variable cash dividend of about $0.72 per share payable Feb 12, 2026.Cal-Maine Foods Financial Statement Overview
Summary
Strong current-cycle profitability and cash generation (high margins and strong free cash flow) supported by an exceptionally conservative, virtually debt-free balance sheet. The main constraint is pronounced cyclicality/volatility in revenue, margins, and cash flows across prior periods.Income Statement
TTM (Trailing-Twelve-Months) results show very strong profitability, with gross margin ~43.5% and net margin ~28.9%, supported by high operating leverage (EBIT margin ~37.7%). Revenue growth is robust in TTM (~+3.2x) versus low growth in FY2025 (~+0.8%) and a contraction in FY2024 (~-26%), highlighting meaningful cyclicality in pricing/industry conditions. Overall, earnings power is currently excellent, but the multi-year volatility keeps the score below the top tier.Balance Sheet
The balance sheet is exceptionally conservative with effectively no debt (debt-to-equity ~0), providing strong downside protection and financial flexibility. Equity has expanded materially (from ~$1.0B in FY2021 to ~$2.7B in TTM), and returns on equity are very strong in the most recent periods (TTM ~52%, FY2025 ~48%). The main limitation is that profitability and returns have historically swung sharply (e.g., very low returns in FY2021), indicating results depend heavily on the operating cycle even if leverage risk is minimal.Cash Flow
Cash generation is strong in the most recent periods: TTM operating cash flow (~$1.39B) and free cash flow (~$1.22B) are high, with free cash flow growth solid in TTM (~+14%). Free cash flow is well-supported by earnings (free cash flow to net income ~0.88 in TTM and ~0.87 in FY2025), suggesting good cash conversion. The key weakness is volatility across the cycle—FY2021 had negative free cash flow and weak operating cash flow—so cash flows are strong now but not consistently stable year-to-year.| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.26B | 2.33B | 3.15B | 1.78B | 1.35B |
| Gross Profit | 1.85B | 541.57M | 1.20B | 337.06M | 160.66M |
| EBITDA | 1.70B | 440.76M | 1.07B | 234.81M | 49.74M |
| Net Income | 1.22B | 277.89M | 758.02M | 132.65M | 2.06M |
Balance Sheet | |||||
| Total Assets | 3.10B | 2.20B | 1.96B | 1.44B | 1.24B |
| Cash, Cash Equivalents and Short-Term Investments | 1.39B | 812.38M | 647.91M | 174.51M | 169.51M |
| Total Debt | 0.00 | 0.00 | 0.00 | 1.44M | 2.38M |
| Total Liabilities | 536.47M | 401.89M | 354.14M | 332.96M | 229.31M |
| Stockholders Equity | 2.56B | 1.80B | 1.61B | 1.10B | 1.01B |
Cash Flow | |||||
| Free Cash Flow | 1.07B | 304.28M | 726.44M | 53.81M | -68.93M |
| Operating Cash Flow | 1.23B | 451.40M | 863.01M | 126.21M | 26.14M |
| Investing Cash Flow | -579.52M | -412.59M | -375.11M | -117.02M | -44.19M |
| Financing Cash Flow | -386.72M | -93.76M | -254.16M | -7.46M | -2.72M |
Cal-Maine Foods Technical Analysis
Negative
79.07
Price Trends
84.66
Negative
92.06
Negative
93.50
Negative
Market Momentum
-2.94
Positive
22.81
Positive
11.21
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CALM, the sentiment is Negative. The current price of 79.07 is below the 20-day moving average (MA) of 81.54, below the 50-day MA of 84.66, and below the 200-day MA of 93.50, indicating a bearish trend. The MACD of -2.94 indicates Positive momentum. The RSI at 22.81 is Positive, neither overbought nor oversold. The STOCH value of 11.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CALM.
Cal-Maine Foods Risk Analysis
Cal-Maine Foods disclosed 38 risk factors in its most recent earnings report. Cal-Maine Foods reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cal-Maine Foods Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.51B | 3.11 | 48.69% | 10.53% | 65.80% | 197.95% | |
73 Outperform | $1.38B | 23.35 | 20.71% | ― | 23.56% | 15.06% | |
69 Neutral | $8.84B | 10.20 | 14.44% | 4.44% | ― | ― | |
66 Neutral | $19.33B | 10.74 | 10.24% | 3.14% | 10.29% | 17.32% | |
64 Neutral | $1.72B | 21.97 | 3.95% | 3.34% | 1.11% | 414.23% | |
63 Neutral | $1.38B | 47.66 | 8.75% | 2.23% | 7.09% | -83.75% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
CALM
Cal-Maine Foods
73.86
-26.85
-26.66%
BG
Bunge Global
101.02
21.59
27.18%
FDP
Fresh Del Monte Produce
36.51
6.06
19.90%
VITL
Vital Farms
30.81
-11.27
-26.78%
DOLE
Dole
14.59
2.07
16.53%
SFD
Smithfield Foods
22.75
3.17
16.19%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.