Why Mission Produce stock is up today

Actions of Mission product (AVO 19.55%) rose Tuesday after the avocado, mango and blueberry business reported results for the third fiscal quarter 2024. As of 1:30 p.m. ET, Mission Produce stock was up 19.3%.

High prices are a good thing for Mission Produce

Prices for fresh produce can fluctuate widely, but prices worked in Mission Produce’s favor during the fiscal third quarter, which ended July 31. During that time, its revenue was predominantly generated by avocados, and the volume of sales for them fell by 10% compared to the previous year. year, which is not ideal. But avocado prices rose 36 percent, which contributed to a 24 percent increase in the company’s revenue — a bigger-than-expected gain.

Mission Produce management expects avocado prices to decline in the fourth quarter, although they will still be higher than last year’s fourth quarter. This will help increase revenue. By switching from avocados to blueberries, sales volume is expected to increase, but prices will be lower, meaning that blueberries are unlikely to contribute to revenue growth.

However, higher avocado prices were enough to keep investors bullish on Mission Produce.

what now

It can trade for a little less than 1x sales, but I think Mission Produce stock is fairly valued here. This business can be unpredictable due to uncertainty about the size of harvests and the impact on prices. But the company is doing well right now, having earned $37 million in operating income in the first three quarters of its fiscal year.

Misiune Produce shareholders just need to be comfortable with volatility. Product prices may fluctuate higher or lower due to factors beyond management’s control, which may affect business results and stock price.