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Mission Produce Updates 1 Key Risk Factor
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Mission Produce Updates 1 Key Risk Factor

Shares of Mission Produce, Inc. (AVO) have declined about 27.1% so far this year. AVO’s recent first-quarter performance missed the Street’s expectations despite double-digit growth in its top-line.

The vertically integrated company sources, produces, and distributes fresh Hass avocados and mangos in over 25 countries. Additionally, it also owns more than 11,000 acres across the globe.

Revenue increased 25% year-over-year to $216.6 million, but fell short of expectations by $26.6 million. Net loss per share at $0.17 came in wider than consensus by $0.23. This growth in revenue came from a 50% higher average selling price, which was partially offset by 18% lower avocado volume.

During the quarter, AVO faced challenges from higher fruit costs and transportation expenses, coupled with decreasing volumes across the sector. Further, the company also faced implementation issues in its enterprise resource planning (ERP) system during this period.

While these ERP challenges have impacted AVO’s ability to manage operations and drive per-unit margins, the necessary infrastructure upgrade undertaken enables the company to manage its growing global footprint for future periods.

With these developments in mind, let’s have a look at what’s changed in AVO’s key risk factors that investors should know.

Risk Factors

According to the TipRanks Risk Factors tool, Mission Produces’ top risk category is Finance & Corporate, contributing 11 of the total 39 risks identified for the stock.

However, in its recent report, the company has changed one key risk factor under the Tech & Innovation risk category. AVO has three Tech & innovation risk factors that are in line with the industry average.

AVO highlighted that its internal operations or services provided could face disruption due to data protection breaches, cyber-attacks, or systems integration issues. Such an event could impact AVO’s expected revenue, lead to higher expenses or damage the company’s reputation impacting its share price as a consequence.

Further, the company has seen difficulties in implementing new systems and transitioning data and may face such a challenge in the future as well.

Hedge Fund Activity

According to TipRanks data, Wall Street’s top hedge funds have decreased holdings in Mission Produce by 8.2 thousand shares in the last quarter, indicating a neutral hedge fund confidence signal in the stock.

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