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Calavo Growers, Inc – Fresh Fruit and Vegetable Merchant Wholesalers
Calavo Growers, Inc. is a global avocado-industry leader and provider of value-added fresh food serving retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesalers worldwide. The Company's Fresh segment procures and markets fresh avocados and select other fresh produce, including tomatoes and papayas. The Renaissance Food Group (RFG) segment creates, markets and distributes a portfolio of healthy, fresh foods, including fresh-cut fruit, fresh-cut vegetables and prepared foods. The Foods segment manufactures and distributes guacamole and salsa. Founded in 1924, Calavo's fresh food products are sold under the respected Calavo brand name as well as Garden Highway, Chef Essentials and a variety of private label and store brands.
Analysis Results
Intrinsic Value $90.50
Latest Price $31.75
Relative Value 65% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 9.2%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 9.2%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 43.9 41.7
2023 47.9 43.3
2024 52.3 44.9
2025 57.1 46.6
2026 62.4 48.4
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 1870 million. This corresponds to a present value of 1380 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 225 million. Adding in the terminal value gives a total present value of 1600 million.

There are presently 17.7 million outstanding shares, so the intrinsic value per share is 90.5.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 305,282,000
Current Cash 3,770,000
Current Liabilities 229,248,000
Current Debt 3,174,000
Non-Cash Working Capital (NCWC) 75,438,000
Change in NCWC 28,036,000
EBIT -1,946,000
Tax Provision 21,494,000
Depreciation and Amortization 35,142,000
Capital Expenditure -22,876,000
Unlevered Free Cash Flow 38,356,000
Current Assets 135,895,000
Current Cash 4,055,000
Current Liabilities 106,331,000
Current Debt 21,893,000
Non-Cash Working Capital (NCWC) 47,402,000
Change in NCWC 17,727,000
EBIT 25,836,000
Tax Provision -4,292,000
Depreciation and Amortization 16,093,000
Capital Expenditure -11,343,000
Unlevered Free Cash Flow 48,313,000
Current Assets 127,515,000
Current Cash 7,973,000
Current Liabilities 90,629,000
Current Debt 762,000
Non-Cash Working Capital (NCWC) 29,675,000
Change in NCWC -13,490,000
EBIT 54,887,000
Tax Provision 12,882,000
Depreciation and Amortization 13,633,000
Capital Expenditure -16,721,000
Unlevered Free Cash Flow 24,015,834
Current Assets 128,510,000
Current Cash 1,520,000
Current Liabilities 98,943,000
Current Debt 15,118,000
Non-Cash Working Capital (NCWC) 43,165,000
Change in NCWC 26,000,000
EBIT 44,685,000
Tax Provision 12,719,000
Depreciation and Amortization 13,042,000
Capital Expenditure -15,004,000
Unlevered Free Cash Flow 56,017,079
Current Assets 119,828,000
Current Cash 6,625,000
Current Liabilities 116,167,000
Current Debt 20,129,000
Non-Cash Working Capital (NCWC) 17,165,000
Change in NCWC -13,743,000
EBIT 58,294,000
Tax Provision 20,450,000
Depreciation and Amortization 10,691,000
Capital Expenditure -44,510,000
Unlevered Free Cash Flow -9,902,062
Current Assets 134,953,000
Current Cash 13,842,000
Current Liabilities 109,341,000
Current Debt 19,138,000
Non-Cash Working Capital (NCWC) 30,908,000
Change in NCWC -20,001,000
EBIT 60,524,000
Tax Provision 21,869,000
Depreciation and Amortization 8,812,000
Capital Expenditure -21,859,000
Unlevered Free Cash Flow 5,535,949
Current Assets 116,822,000
Current Cash 7,171,000
Current Liabilities 97,858,000
Current Debt 39,116,000
Non-Cash Working Capital (NCWC) 50,909,000
Change in NCWC -5,393,000
EBIT 43,628,000
Tax Provision 16,093,000
Depreciation and Amortization 8,038,000
Capital Expenditure -18,099,000
Unlevered Free Cash Flow 11,956,098
Current Assets 123,044,000
Current Cash 6,744,000
Current Liabilities 100,997,000
Current Debt 40,999,000
Non-Cash Working Capital (NCWC) 56,302,000
Change in NCWC 12,723,000
EBIT 34,611,000
Tax Provision -3,916,000
Depreciation and Amortization 6,926,000
Capital Expenditure -11,613,000
Unlevered Free Cash Flow 42,647,000
Current Assets 109,730,000
Current Cash 8,019,000
Current Liabilities 97,380,000
Current Debt 39,248,000
Non-Cash Working Capital (NCWC) 43,579,000
Change in NCWC 15,440,000
EBIT 25,006,000
Tax Provision 7,866,000
Depreciation and Amortization 6,367,000
Capital Expenditure -6,746,000
Unlevered Free Cash Flow 32,074,752
Current Assets 83,464,000
Current Cash 7,103,000
Current Liabilities 73,808,000
Current Debt 25,586,000
Non-Cash Working Capital (NCWC) 28,139,000
Change in NCWC -1,037,000
EBIT 28,038,000
Tax Provision 11,055,000
Depreciation and Amortization 5,909,000
Capital Expenditure -7,749,000
Unlevered Free Cash Flow 14,091,787

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