Lavoro Limited (LVRO) AI Stock Analysis

• Market Cap: $163.78M
• Dividend Yield: N/A
• Average Volume (3M): 137.57K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.04
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 3,767
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Agricultural Inputs
• EPS (TTM): -0.76
• Shares Outstanding: 116,986,610
• 10 Day Avg. Volume: 12,873
• 30 Day Avg. Volume: 137,569
• PEG Ratio: -0.02
• Price to Book (P/B): 2.98
• Price to Sales (P/S): 0.36
• P/FCF Ratio: 65.12
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2.00
• Price Target Upside: 42.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 44 Neutral
• Price Target: $2.00 ▲(42.86% 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

Distribution Network

Lavoro's extensive distribution network allows it to reach a wide customer base, enhancing market penetration and customer loyalty, which are crucial for long-term growth in the agricultural sector.

Strategic Reorganization

The reorganization plan aims to improve financing and operational efficiencies, which can enhance long-term resilience and profitability by securing supply chains and stabilizing operations.

Latam Ag Retail Revenue Growth

Growth in the Latam Ag Retail segment indicates stable market conditions and currency appreciation, suggesting potential for future expansion and revenue stability in the region.

Negative Factors

Profitability Challenges

Ongoing profitability issues, indicated by negative net income and declining margins, can hinder the company's ability to reinvest in growth and maintain competitive positioning.

Revenue Decline

Significant revenue declines, particularly in key segments, reflect operational challenges and inventory issues, which could impact long-term financial stability and market competitiveness.

Inventory Issues

Inventory shortages in crucial segments like Brazil Ag Retail can disrupt sales and customer relationships, affecting the company's ability to meet demand and maintain market share.

Lavoro Limited Business Overview & Revenue Model

Company Description

Lavoro 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 Money

Lavoro 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 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

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

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

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

Lavoro Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 1.4 is below the 20-day moving average (MA) of 1.69, below the 50-day MA of 1.68, and below the 200-day MA of 2.80, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 36.41 is Neutral, neither overbought nor oversold. The STOCH value of 4.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LVRO.

Lavoro Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UAN	72 Outperform	$954.44M	10.85	28.37%	10.07%	8.15%	77.68%
BIOX	62 Neutral	$106.61M	193.48	-3.00%	―	-28.28%	-1718.93%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
IPI	56 Neutral	$364.59M	―	-34.48%	―	11.93%	-311.34%
SMG	52 Neutral	$3.14B	70.79	4.98%	4.86%	-2.05%	―
LVRO	44 Neutral	$163.78M	―	-69.68%	―	―	―
AVD	41 Neutral	$148.41M	―	-42.97%	0.78%	-9.57%	-3226.39%