Calavo Growers markets, and distributes avocados, prepared avocados, and other perishable foods to food distributors, produce wholesalers, supermarkets, convenience stores, and restaurants worldwide. The company was founded in 1924 and is based in Santa Paula, California.
CVGW Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Calavo Growers Inc. To summarize, we found that Calavo Growers Inc ranked in the 13th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Calavo Growers Inc ended up being:
Calavo Growers Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -22.28. This coverage rate is greater than that of merely 5.54% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Relative to other stocks in its sector (Consumer Defensive), Calavo Growers Inc has a reliance on debt greater than only 20.77% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
LND, IBA, BF.B, BRBR, and JVA can be thought of as valuation peers to CVGW, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
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The Value Investor on Seeking Alpha | October 3, 2020
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