Calavo Growers Inc. Common Stock (CVGW)

FairStock Score: 27/100 — RISKY

Key Financials

Strengths

• Generates $22 million in annual free cash flow (4.3% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.11, providing financial flexibility
• Altman Z-Score of 4.2 confirms minimal bankruptcy risk and strong solvency
• Attractive 2.9% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($15) with negative 85% margin of safety—limited downside protection
• Revenue declining at 20.9% year-over-year signals potential demand weakness or market share loss
• Weak Piotroski F-Score of 3/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Calavo Growers Inc. Common Stock is a micro-cap consumer defensive company valued at $504 million. The business generates $616 million in annual revenue with a 0.1% net margin and $22 million in free cash flow. From a quality standpoint, Calavo shows weak Piotroski F-Score of 3/9 signaling deteriorating fundamentals and healthy Altman Z-Score of 4.2. On valuation, the stock is trading at a premium 31.1x earnings, with trades above its Graham Number with a negative 85% margin. Growth dynamics show revenue growing at -20.9% and profit growth of -83.4%. The 2.9% dividend yield adds an income component for patient holders. Our composite FairStock Score of 27/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $22 million in annual free cash flow (4.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 31x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer