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Lavoro Limited (LVRO)
NASDAQ:LVRO
US Market

Lavoro Limited (LVRO) AI Stock Analysis

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Lavoro Limited

(NASDAQ:LVRO)

46Neutral
Lavoro's financial performance is marked by strong revenue growth but hindered by profitability challenges and leverage concerns. Technical indicators suggest bearish momentum, and valuation metrics reflect ongoing financial difficulties. The earnings call supports a neutral outlook, with improvements in gross profit overshadowed by revenue and liquidity challenges.
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 and Profitability
Management emphasized that farmer sentiment and anticipated harvest profitability for FY25 is more favorable relative to previous quarters.
Negative Factors
Financial Performance
The company additionally reported a ($76.2M) adjusted net loss for the period, widening over 400% y/y, primarily driven by income tax headwinds and higher financing costs.
Inventory Shortages
Severe inventory shortages in key crop categories, specifically soybean, in Brazil during critical planting months have affected the company's outlook.
Revenue Guidance Reduction
Management reduced its FY25 guidance to project midpoint revenues of $1.2B, approximately 23% below previous guidance.

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

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 through the sale of agricultural inputs such as fertilizers, seeds, and crop protection chemicals to farmers and agricultural businesses. The company capitalizes on its extensive distribution network to reach a broad customer base, ensuring that its products are accessible to farmers in various regions. Additionally, Lavoro Limited may engage in strategic partnerships with agricultural technology firms to integrate advanced solutions into its product offerings, thereby enhancing its value proposition and potentially increasing sales. The company’s earnings are significantly influenced by factors such as agricultural demand, commodity prices, and seasonal trends that affect planting and harvesting cycles.

Lavoro Limited Financial Statement Overview

Summary
Lavoro Limited exhibits strong revenue growth but struggles with profitability and rising leverage. The company is improving its cash generation from operations, which is critical for future growth and debt management. However, strategic cost management and operational efficiency enhancements are needed to bolster financial stability.
Income Statement
45
Neutral
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.
Balance Sheet
55
Neutral
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.
Cash Flow
60
Neutral
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.
Breakdown
Jun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
9.39B9.35B7.75B5.10B2.71B
Gross Profit
1.34B1.73B1.33B735.89M322.20M
EBIT
11.91M226.87M359.87M132.00M-61.66M
EBITDA
411.68M594.52M853.01M165.21M-68.12M
Net Income Common Stockholders
-762.46M-260.71M78.17M38.39M-108.70M
Balance SheetCash, Cash Equivalents and Short-Term Investments
911.34M564.29M254.41M459.46M158.50M
Total Assets
8.35B7.52B5.69B4.40B2.66B
Total Debt
1.85B1.15B865.80M317.54M201.35M
Net Debt
936.55M585.60M611.39M-141.92M42.86M
Total Liabilities
6.99B5.41B4.02B2.93B1.81B
Stockholders Equity
1.12B1.86B1.45B1.35B787.71M
Cash FlowFree Cash Flow
51.33M42.69M-292.26M18.88M-45.27M
Operating Cash Flow
165.75M108.07M-244.56M53.82M-11.43M
Investing Cash Flow
-318.27M-220.73M-293.95M-393.36M-280.43M
Financing Cash Flow
489.52M448.73M333.47M640.50M381.00M

Lavoro Limited Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.68
Price Trends
50DMA
3.60
Negative
100DMA
4.06
Negative
200DMA
4.37
Negative
Market Momentum
MACD
-0.20
Negative
RSI
32.16
Neutral
STOCH
17.53
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 2.68 is below the 20-day moving average (MA) of 2.91, below the 50-day MA of 3.60, and below the 200-day MA of 4.37, indicating a bearish trend. The MACD of -0.20 indicates Negative momentum. The RSI at 32.16 is Neutral, neither overbought nor oversold. The STOCH value of 17.53 is Positive, 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 (49)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FMFMC
63
Neutral
$5.24B15.468.78%6.03%-5.36%-74.25%
61
Neutral
$273.42M189.570.51%-10.30%-93.51%
IPIPI
59
Neutral
$437.98M-36.73%-8.74%-492.08%
AVAVD
55
Neutral
$122.35M-8.43%2.84%-2.35%-782.69%
SMSMG
50
Neutral
$3.07B4.98%5.24%3.61%94.27%
49
Neutral
$1.93B-1.47-21.02%3.74%0.80%-29.57%
46
Neutral
$313.52M-69.68%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LVRO
Lavoro Limited
2.68
-3.02
-52.98%
AVD
American Vanguard
4.25
-7.48
-63.77%
FMC
FMC
37.78
-21.35
-36.11%
IPI
Intrepid Potash
32.88
12.10
58.23%
SMG
Scotts Miracle-Gro Company
54.50
-13.36
-19.69%
BIOX
Bioceres Crop Solutions
4.59
-7.55
-62.19%

Lavoro Limited Earnings Call Summary

Earnings Call Date:Apr 14, 2025
(Q1-2025)
|
% Change Since: -10.07%|
Next Earnings Date:May 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong growth in the Crop Care segment and ongoing cost-saving initiatives. However, the company faced significant challenges with revenue decline, increased net loss, and liquidity issues impacting inventory and operations. The balance of positive and negative aspects results in a neutral sentiment.
Q1-2025 Updates
Positive Updates
Crop Care Segment Growth
Crop Care demonstrated strength with double-digit year-over-year growth in revenue, gross profit, and adjusted EBITDA. Specifically, Crop Care saw a 68% revenue increase, led by Union Agro and Perterra.
Gross Profit and Margin Expansion
Despite lower revenue, gross profit increased 10% to BRL321.2 million with gross margin expanding 320 basis points to 15.6%.
Positive Farmer Sentiment and Market Conditions
Improvement in farmer profitability expectations for the '24/'25 crop year, with favorable weather conditions and stable agrochemical prices contributing positively.
Cost Savings Initiatives
Lavoro is implementing cost-saving measures such as retail network optimization and fixed cost reductions, expected to benefit the second half of the fiscal year.
Negative Updates
Revenue Decline
Consolidated revenue decreased by 13% year-over-year due to input price deflationary headwinds in Brazil Ag Retail and a 12% depreciation of the Brazilian real.
Net Loss Increase
Lavoro reported a net loss of BRL267.1 million, an increase of BRL196.1 million year-over-year, primarily due to deferred tax assets and higher finance costs.
Inventory and Liquidity Challenges
Significant liquidity constraints and inventory shortages affected Brazil retail operations, especially during the critical soybean crop window.
No Growth in Adjusted EBITDA Expected
The company no longer expects adjusted EBITDA to grow in fiscal year 2025 compared to the previous year.
Company Guidance
During Lavoro's fiscal 2025 first quarter earnings call, significant guidance metrics were shared. The company's consolidated revenue declined 13% year-over-year to BRL2.05 billion, primarily due to input price deflation in Brazil Ag Retail. Despite the revenue dip, gross profit rose 10% to BRL321.2 million, with a gross margin expansion of 320 basis points to 15.6%. The net loss increased to BRL267.1 million, attributed mainly to deferred tax assets and higher finance costs. Adjusted EBITDA decreased by 5% to BRL54.4 million. The outlook for fiscal year 2025 was adjusted, with expected consolidated net revenue ranging from BRL6.5 billion to BRL7.5 billion and the adjusted EBITDA no longer anticipated to grow compared to the previous year, reflecting the impact of supply chain constraints and challenging market conditions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.