Calavo Growers (CVGW:NAS) Fundamental Valuation Report


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Calavo Growers $79.25 (USD) Close Price as of 20/12/2017

Based on the analysis conducted in this report, Calavo Growers, (CVGW:NAS) is found to be  Overvalued.

Company Calavo Growers
Symbol:Exchange CVGW:NAS
Industry Consumer Defensive:Farm Products
Close Price/Date $79.25 (USD) 20/12/2017
Weighted Average Valuation $65.20 (USD)
Summary CVGW:NAS is found to be  Overvalued by 17.7% using the 2 valuation models shown below.
Valuation Models Used Adjusted Book Value: $60.11 (USD)
(in order of importance) Multiples: $72.83 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Overvalued on an Asset Valuation basis

Valuation Details

Calavo Growers Valuations

Summary chart

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for CVGW:NAS

Using a discounted cash flow model we generated an intrinsic value of $55.73 (USD) for CVGW:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

CVGW:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $55.73 1% 5% 1% 5%
WACC (or Ke) 7.45 $70.56 $45.90
Terminal Growth Rate 2.50 $46.79 $69.21
Tax Rate 0.36 $60.68 $50.79
Cash Flow 103,558,963 $52.25 $59.21
Capital Expenditures -13,213,200 $55.28 $56.19
Long Term Debt 19,122,000 $55.79 $55.68

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $150.86 (USD) for CVGW:NAS. We also generated a valuation of $48.11 (USD) using other metrics and comparables.
The comparable companies were Calyxt (CLXT:NAS)

Company CVGW:NAS End Date Value
Earnings/Share $2.07 (USD)
Book Value/Share $14.13 (USD)
Sales/Share $59.80 (USD)
Cash Flow/Share $2.75 (USD)
EBITDA/Share $0.00 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) -27.6
$150.86 (USD) 0.0
$0.00 (USD) -45.2
$0.00 (USD) 91.6
$0.00 (USD) 0.0
CVGW:NAS Ratios Used Average Values CLXT:NAS
38.29 PE Ratio 0.00 0.00
5.61 PB Ratio 10.67 10.67
1.33 PS Ratio 1682.67 1682.67
28.81 PCF Ratio 0.00 0.00
21.30 EV to EBITDA 0.00 0.00

Multiples

Using a multiples approach we generated a valuation of  $72.83 (USD) for CVGW:NAS

Company CVGW:NAS End Date Value
Earnings/Share $2.07 (USD)
Book Value/Share $14.13 (USD)
Sales/Share $59.80 (USD)
Cash Flow/Share $2.75 (USD)
EBITDA/Share $4.00 (USD)
Price Based on Comps Adjustment Factor
$87.28 (USD) 0
$69.58 (USD) 0
$67.52 (USD) 0
$68.40 (USD) 0
$71.36 (USD) 0
Ratios Ratio Average
PE Ratio 42.17
PB Ratio 4.92
PS Ratio 1.13
PCF Ratio 24.87
EV to EBITDA 17.86

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CVGW:NAS for the last 10 years was  4.90

We ran the Adjusted Book Value for  CVGW:NAS and generated a book value of  $12.28 (USD)
By multiplying these we get an adjusted valuation of  $60.11 (USD)

Analyst Data

In the Stockcalc database there are no analysts that provide a valuation for CVGW:NAS.

Company Overview (CVGW:NAS USD)

Price 78.60
Range 78.55 – 79.50
52 week 48.75 – 83.00
Open 78.80
Vol / Avg. 0.00/151,527.00
Mkt cap 1.38B
P/E 37.95
Div/yield 0.95/1.21
EPS 2.07
Shares 17.53M
Beta 0.65
Inst. own 94%
Summary chart

Detailed Company Description

Calavo Growers Inc is in the avocado industry and an expanding provider of value-added fresh food. It sells avocados to a group of supermarket chains, wholesalers, food service and other distributors, under brand labels, as well as private labels.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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