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Lavoro Limited (LVRO)
NASDAQ:LVRO
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Lavoro Limited
(NASDAQ:LVRO)
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Select Model
Rating:44Neutral
Price Target:
$2.00
▲(8.70% 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 (LVRO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$215.26M
Dividend YieldN/A
Average Volume (3M)138.21K
Price to Earnings (P/E)―
Beta (1Y)0.95
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees3,767
SectorBasic Materials
Sector Strength58
IndustryAgricultural Inputs
Share Statistics
EPS (TTM)-0.76
Shares Outstanding116,986,610
10 Day Avg. Volume387,298
30 Day Avg. Volume138,208
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
$2.00Price Target Upside8.70% Upside
Rating ConsensusHold
Number of Analyst Covering1
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
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.45
Neutral
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.50
Neutral
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.40
Negative
| 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
Positive
1.84
Price Trends
1.85
Negative
2.13
Negative
3.13
Negative
Market Momentum
-0.05
Negative
54.91
Neutral
28.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LVRO, the sentiment is Positive. The current price of 1.84 is above the 20-day moving average (MA) of 1.55, below the 50-day MA of 1.85, and below the 200-day MA of 3.13, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 54.91 is Neutral, neither overbought nor oversold. The STOCH value of 28.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
62 Neutral | 104.73M | -2.03 | 0.00% | ― | -28.28% | -1718.93% | |
58 Neutral | 4.52B | 45.98 | 2.24% | 6.41% | 1.16% | -92.85% | |
55 Neutral | 153.53M | -1.23 | -54.36% | ― | -9.57% | -3226.39% | |
52 Neutral | 376.18M | -1.81 | -41.55% | ― | 11.93% | -311.34% | |
52 Neutral | 3.35B | 75.63 | -31.07% | 4.55% | -2.05% | 0.00% | |
44 Neutral | $215.26M | ― | -69.68% | ― | ― | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
Performance Comparison
LVRO
Lavoro Limited
1.84
-2.16
-54.00%
AVD
American Vanguard
5.40
-0.14
-2.53%
FMC
FMC
36.22
-24.34
-40.19%
IPI
Intrepid Potash
28.25
4.59
19.40%
SMG
Scotts Miracle-Gro Company
58.05
-16.74
-22.38%
BIOX
Bioceres Crop Solutions
1.67
-6.42
-79.36%
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.