Lavoro Limited (LVRO) AI Stock Analysis

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Lavoro Limited

(NASDAQ:LVRO)

Rating:44Neutral

Price Target:

$2.00

▲(14.94% Upside)

Lavoro Limited faces significant challenges, with financial performance and earnings call sentiment being the most impactful factors. The company struggles with profitability and cash flow issues, while technical indicators suggest a bearish trend. Valuation metrics are weak due to ongoing losses. Despite efforts to reorganize, current difficulties overshadow potential improvements.

Positive Factors

Crop Care Segment Growth

Growth in the higher margin Crop Care segment was the most positive metric, with revenues increasing 48% y/y in Q1/25.

Farmer Sentiment

Management emphasized that farmer sentiment and anticipated harvest profitability for FY25 is more favorable relative to previous quarters.

Reorganization Plan

The company has submitted a reorganization plan to create a multi-year inventory financing framework, providing financial relief and positioning it for recovery.

Negative Factors

Brazilian Market Uncertainty

There is uncertainty in the Brazilian agriculture market, leading to a downgrade in the stock rating to HOLD.

Earnings Decline

Lavoro preannounced earnings showing a significant decline in revenue and gross profit compared to last year.

Guidance Reduction

Management reduced its FY25 guidance to project midpoint revenues of $1.2B, approximately 23% below previous guidance.

Lavoro Limited (LVRO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$202.39M

Dividend YieldN/A

Average Volume (3M)10.75K

Price to Earnings (P/E)―

Beta (1Y)0.91

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees3,767

SectorBasic Materials

Sector Strength65

IndustryAgricultural Inputs

Share Statistics

EPS (TTM)-0.76

Shares Outstanding116,986,610

10 Day Avg. Volume20,014

30 Day Avg. Volume10,753

Financial Highlights & Ratios

PEG Ratio-0.02

Price to Book (P/B)2.98

Price to Sales (P/S)0.36

P/FCF Ratio65.12

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$1.92

Price Target Upside10.34% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering4

Lavoro Limited Business Overview & Revenue Model

Company DescriptionLavoro Limited operates as an agricultural inputs retailer. It sells agricultural inputs, including seeds, fertilizers and specialty products, crop protection products, and others for the agricultural industry. The company also produces specialty fertilizers, crop protection products, and biological crop inputs. It operates in Brazil, Colombia, and Uruguay. The company sells its products through its physical stores and digital. Lavoro Limited was founded in 2017 and is based in Sao Paulo, Brazil.

How the Company Makes MoneyLavoro Limited generates revenue primarily through the sale of agricultural inputs such as seeds, fertilizers, and crop protection products. The company leverages its extensive distribution network to reach a wide customer base, including individual farmers and large agricultural enterprises. Key revenue streams include direct sales of products as well as strategic partnerships with manufacturers and suppliers to offer competitive pricing and exclusive product lines. Additionally, Lavoro Limited may engage in value-added services such as consulting and agronomic support, further enhancing its revenue model and customer loyalty.

Lavoro Limited Earnings Call Summary

Earnings Call Date:Jun 18, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Negative

The earnings call highlighted significant challenges faced by Lavoro, including a substantial decline in revenue and gross profit across various segments due to inventory shortages and unfavorable market conditions. However, the introduction of a reorganization plan for Lavoro Brazil and positive developments in Latam Ag Retail are seen as steps toward stabilization and future growth.

Q2-2025 Updates

Positive Updates

Reorganization Plan for Lavoro Brazil

Lavoro Brazil announced a reorganization plan to standardize supplier relationships and extend payment terms, aiming to create a leaner and more resilient business unit.

Latam Ag Retail Revenue Growth

Latam Ag Retail revenue grew 4% to BRL 287 million, reflecting stable market conditions and the appreciation of the Colombian peso.

Improved Farmer Profitability and Liquidity

Projections indicate a meaningful recovery in farmer profitability due to improved weather conditions and stronger commodity prices. On-time farmer repayments improved, reflecting better liquidity and effective credit risk management.

Negative Updates

Decline in Consolidated Preliminary Revenue

Consolidated preliminary revenue for the second quarter declined 27% year-over-year to BRL 2.25 billion, primarily due to inventory shortages in Brazil Ag Retail.

Brazil Ag Retail Segment Revenue Decline

Brazil Ag Retail segment's revenue decreased by 30% year-over-year to BRL 1.84 billion due to inventory shortages and purchase order cancellations.

Crop Care Segment Revenue and Margin Decline

Crop Care segment revenue decreased by 30% year-over-year to BRL 251 million, with gross margins contracting by 1,160 basis points to 23.7%, due to weaker biological sales and higher raw material costs.

Consolidated Gross Profit and Margin Decline

Consolidated preliminary gross profit decreased 28% to BRL 366 million, with gross margins contracting 40 basis points to 16.3%.

Withdrawal of Fiscal 2025 Financial Outlook

The company withdrew its previously issued fiscal 2025 financial outlook due to the complexities associated with the reorganization plan.

Company Guidance

In the recent business update call, Lavoro provided guidance on their fiscal second quarter 2025 performance and strategic initiatives. The company reported a 27% year-over-year decline in preliminary unaudited revenue to BRL 2.25 billion, impacted by severe inventory shortages in Brazil Ag Retail, which also indirectly affected Crop Care revenue. In U.S. dollar terms, revenue fell by 38% to $384 million, exacerbated by a 15% depreciation of the Brazilian real. Segment-wise, Brazil Ag Retail revenue dropped 30% to BRL 1.84 billion, while Crop Care revenue decreased by 30% to BRL 251 million. Latam Ag Retail, however, grew by 4% to BRL 287 million. The company announced an out-of-court reorganization plan to mitigate supply chain disruptions and extend BRL 2.5 billion in supplier trade payables, aiming to enhance operational efficiency and profitability. Gross profit fell by 28% to BRL 366 million, with gross margins contracting by 40 basis points to 16.3%. Despite these challenges, Lavoro remains committed to strengthening supplier relationships and improving operational resilience.

Lavoro Limited Financial Statement Overview

Summary

Lavoro Limited shows revenue growth but struggles with profitability, as indicated by negative net income and declining EBIT and EBITDA margins. The balance sheet reveals moderate leverage, but declining equity ratios raise concerns. Cash flow generation is improving but remains insufficient to cover capital expenditures comfortably.

Income Statement

Neutral

Lavoro Limited's revenue has shown a steady growth trajectory over the years, with a notable increase from 2020 to 2024. However, the company has struggled with profitability, as indicated by negative net income in recent years. The gross profit margin has been relatively stable, but the net profit margin is negative due to significant net losses. The EBIT and EBITDA margins have also declined, reflecting operational challenges.

Balance Sheet

Neutral

The balance sheet reveals a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. However, the return on equity is concerning due to consistent net losses, which impact shareholder returns. The equity ratio has decreased over time, suggesting a higher reliance on liabilities to finance assets.

Cash Flow

Negative

Lavoro Limited's cash flow statement shows some improvement in operating cash flow, but free cash flow remains low, indicating limited cash available after capital expenditures. The operating cash flow to net income ratio is positive, suggesting operational cash generation despite net losses. However, the free cash flow to net income ratio is weak, reflecting challenges in translating profits into cash.

Breakdown	TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement
Total Revenue	9.08B	9.39B	9.35B	7.75B	5.10B	2.71B
Gross Profit	1.37B	1.34B	1.73B	1.33B	735.89M	322.20M
EBITDA	387.04M	411.68M	594.52M	853.01M	165.21M	-68.12M
Net Income	-944.45M	-762.46M	-260.71M	78.17M	38.39M	-108.70M
Balance Sheet
Total Assets	9.06B	8.35B	7.52B	5.69B	4.40B	2.66B
Cash, Cash Equivalents and Short-Term Investments	510.86M	911.34M	564.29M	254.41M	459.46M	158.50M
Total Debt	1.87B	1.85B	1.15B	865.80M	317.54M	201.35M
Total Liabilities	7.97B	6.99B	5.41B	4.02B	2.93B	1.81B
Stockholders Equity	870.12M	1.12B	1.86B	1.45B	1.35B	787.71M
Cash Flow
Free Cash Flow	-75.47M	51.33M	42.69M	-292.26M	18.88M	-45.27M
Operating Cash Flow	20.48M	165.75M	108.07M	-244.56M	53.82M	-11.43M
Investing Cash Flow	-218.57M	-318.27M	-220.73M	-293.95M	-393.36M	-280.43M
Financing Cash Flow	145.53M	489.52M	448.73M	333.47M	640.50M	381.00M

Lavoro Limited Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.74

Price Trends

50DMA

2.06

Negative

100DMA

2.36

Negative

200DMA

3.40

Negative

Market Momentum

MACD

-0.11

Positive

RSI

37.23

Neutral

STOCH

23.63

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LVRO, the sentiment is Negative. The current price of 1.74 is below the 20-day moving average (MA) of 1.93, below the 50-day MA of 2.06, and below the 200-day MA of 3.40, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 37.23 is Neutral, neither overbought nor oversold. The STOCH value of 23.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LVRO.

Lavoro Limited Risk Analysis

Lavoro Limited disclosed 86 risk factors in its most recent earnings report. Lavoro Limited 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

Lavoro Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BIOX	62 Neutral	$176.22M	193.48	-3.00%	―	-13.98%	-403.56%
Sector *	61 Neutral	$10.31B	6.18	0.76%	2.94%	3.30%	-36.34%
FMC	58 Neutral	$4.94B	50.95	2.88%	5.84%	1.16%	-92.85%
SMG	54 Neutral	$3.59B	80.86	4.98%	4.25%	-2.05%	―
AVD	53 Neutral	$149.26M	―	-42.97%	0.78%	-9.57%	-3226.39%
IPI	51 Neutral	$399.22M	―	-34.48%	―	11.93%	-311.34%
LVRO	44 Neutral	$202.39M	―	-69.68%	―	―	―

* Basic Materials Sector Average

Performance Comparison

LVRO

Lavoro Limited

1.74

-3.15

-64.42%

AVD

American Vanguard

5.40

-0.36

-6.25%

FMC

39.74

-22.58

-36.23%

IPI

Intrepid Potash

30.56

6.09

24.89%

SMG

Scotts Miracle-Gro Company

62.18

-6.00

-8.80%

BIOX

Bioceres Crop Solutions

2.70

-8.37

-75.61%

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.Date of analysis: Jul 28, 2025