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Lavoro Limited (LVRO)
NASDAQ:LVRO
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Lavoro Limited
(NASDAQ:LVRO)
Rating:48Neutral
Price Target:
$2.00
▼(-6.10%Downside)
Positive Factors
Farmer Sentiment
Management emphasized that farmer sentiment and anticipated harvest profitability for FY25 is more favorable relative to previous quarters.
Financial Recovery Plan
The company has submitted a reorganization plan to create a multi-year inventory financing framework, providing financial relief and positioning it for recovery.
Segment Growth
Growth in the higher margin Crop Care segment was the most positive metric, with revenues increasing 48% y/y in Q1/25.
Negative Factors
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.
Market Uncertainty
There is uncertainty in the Brazilian agriculture market, leading to a downgrade in the stock rating to HOLD.
Lavoro Limited (LVRO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$244.49M
Dividend YieldN/A
Average Volume (3M)7.50K
Price to Earnings (P/E)―
Beta (1Y)0.86
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees3,767
SectorBasic Materials
Sector Strength73
IndustryAgricultural Inputs
Share Statistics
EPS (TTM)-0.67
Shares Outstanding116,986,610
10 Day Avg. Volume11,863
30 Day Avg. Volume7,499
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)1.52
Price to Sales (P/S)0.00
P/FCF Ratio-18.07
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1.92Price Target Upside-9.86% Downside
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. These products are sold to farmers and agricultural businesses, forming the core of the company's revenue streams. Additionally, Lavoro Limited may engage in partnerships with agricultural technology firms or other companies to enhance its product offerings and market reach, contributing to its earnings. The company's success is driven by its ability to provide high-quality, effective agricultural solutions that meet the needs of its customers.
Lavoro Limited Earnings Call Summary
Earnings Call Date:Jun 18, 2025
(Q2-2025)
| % Change Since: -14.80%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Negative
The earnings call reflects a challenging period for Lavoro with significant revenue declines and inventory issues, particularly in the Brazil Ag Retail segment. However, the company is actively working on a reorganization plan to address supply chain disruptions and improve its future outlook. While there are some positive signs in farmer profitability and improved financial management, the current financial difficulties and uncertainties outweigh these positives.Q2-2025 Updates
Positive Updates
Reorganization Plan and Supplier Agreement
Lavoro Brazil reached an agreement with key suppliers that provides for the extension of payment terms to secure future product supply for a multiyear period, aiming to mitigate further supply chain disruption.
Recovery in Farmer Profitability
Projections from ag consultancies indicate a meaningful recovery in farmer profitability for the current crop year, driven by improved weather conditions and stronger commodity prices.
Increased On-Time Farmer Repayments
The percentage of on-time farmer repayments improved notably versus last year, reflecting better farmer liquidity and effective credit risk management.
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.
Negative Updates
Revenue Decline
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 declined 30% year-over-year to BRL 1.84 billion due to inventory shortages.
Crop Care Segment Revenue Decline
Crop Care segment revenue was BRL 251 million in the second quarter 2025, a decrease of 30% year-over-year, affected by temporary industry-wide regulatory uncertainty and product shortages.
Gross Profit and Margin Decrease
Consolidated preliminary gross profit decreased 28% to BRL 366 million, with consolidated gross margins contracting 40 basis points to 16.3%.
Company Guidance
During the recent conference call, Lavoro provided guidance on its fiscal second quarter 2025 performance and outlined its strategic reorganization efforts. The company reported a preliminary, unaudited revenue decline of 27% year-over-year to BRL 2.25 billion, with gross profit decreasing 28% to BRL 366 million, and a contraction in gross margins by 40 basis points to 16.3%. The Brazil Ag Retail segment experienced a 30% revenue decrease to BRL 1.84 billion, while Crop Care segment revenue dropped by 30% to BRL 251 million. Contrarily, Latam Ag Retail revenue rose by 4% to BRL 287 million, attributed to stable market conditions and currency appreciation. Lavoro also announced a reorganization plan involving an extension of BRL 2.5 billion in supplier trade payables and the establishment of a new multiyear FIDC to improve financing and operational efficiencies in Brazil. The company emphasized that the plan, awaiting court approval, is designed to create a standardized framework with suppliers to ensure long-term resilience and profitability.Lavoro Limited Financial Statement Overview
Summary
Lavoro Limited shows strong revenue growth but faces profitability challenges and rising leverage. Cash flow from operations is improving, indicating some efficiency despite profitability issues. The financial stability could improve with strategic cost management.Income Statement
Lavoro Limited's revenue growth has been strong over the years, showing a consistent upward trajectory. However, the company has faced challenges in profitability, with negative net income in recent periods and declining gross profit margins, suggesting pressure on cost management or pricing strategy.45
Neutral
Balance Sheet
The balance sheet indicates moderate leverage with a rising debt-to-equity ratio, which could pose financial risks if not managed carefully. Equity has decreased recently, impacting the equity ratio. However, the company maintains a reasonable level of assets and cash reserves relative to its liabilities.55
Neutral
Cash Flow
Lavoro Limited's cash flow from operations has improved, although free cash flow growth remains constrained. The operating cash flow to net income ratio is positive, indicating some level of operational efficiency despite profitability issues. Consistent capital expenditures suggest ongoing investments in growth.60
Neutral
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
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
Negative
2.13
Price Trends
2.43
Negative
3.10
Negative
3.76
Negative
Market Momentum
-0.12
Negative
42.21
Neutral
56.84
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 2.13 is below the 20-day moving average (MA) of 2.28, below the 50-day MA of 2.43, and below the 200-day MA of 3.76, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 42.21 is Neutral, neither overbought nor oversold. The STOCH value of 56.84 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 (44)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $5.45B | 16.37 | 8.81% | 5.32% | 1.45% | -70.85% | |
61 Neutral | $282.83M | 193.48 | -3.00% | ― | -13.98% | -403.56% | |
57 Neutral | $3.99B | 138.18 | 4.98% | 3.83% | 0.75% | ― | |
49 Neutral | $488.73M | ― | -35.32% | ― | 0.63% | -369.50% | |
48 Neutral | $145.61M | ― | -45.53% | 3.02% | -10.46% | -2007.33% | |
48 Neutral | $244.49M | ― | -69.68% | ― | ― | ― | |
44 Neutral | C$969.59M | -6.68 | -13.73% | 2.50% | 17.55% | -32.57% |
* Basic Materials Sector Average
Performance Comparison
LVRO
Lavoro Limited
2.13
-3.14
-59.58%
AVD
American Vanguard
3.97
-4.51
-53.18%
FMC
FMC
42.66
-12.04
-22.01%
IPI
Intrepid Potash
35.11
10.56
43.01%
SMG
Scotts Miracle-Gro Company
69.41
8.33
13.64%
BIOX
Bioceres Crop Solutions
4.42
-6.80
-60.61%
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.