Mission Produce Rallies in 6 Months: Is This the Right Time to Buy?

Mission Produce Inc. AVO stock has witnessed momentum in recent months, with shares rising as much as 11.9%. With this growth, the AVO stock has outperformed the Zacks Agriculture – Operations industry’s rise of 4.2% and the Consumer Staples sector’s decline of 4.8%. However, the AVO stock has underperformed the S&P 500’s growth of 27.2% in the same period.

AVO’s performance is also notably stronger than that of its close competitors, Adecoagro AGRO and Dole Plc DOLE, which posted declines of 36.3% and 10.8%, respectively, in the past six months. Moreover, the AVO stock has outpaced Corteva Inc. CTVA, which rose 1.5% in the same period.

Mission Produce’s Price Performance

Currently at $11.91, the AVO stock trades 24.6% above its 52-week low of $9.56. The Mission Produce stock’s price also stands 21.9% below its 52-week high of $15.25, reflecting upside potential.

The stock trades above its 200-day simple moving average (SMA), indicating a bullish sentiment. SMA is an essential tool in technical analysis that helps investors evaluate price trends by smoothing out short-term fluctuations. This approach provides a clearer perspective on a stock's long-term direction.

AVO Stock Trades Above 200-Day Moving Average

What’s Driving the AVO Stock’s Momentum

Mission Produce’s momentum is underpinned by solid fundamentals that highlight its operational strength, disciplined financial management and balanced global growth. The company reported revenues of $357.7 million in third-quarter fiscal 2025, up 10% year over year, driven by a 10% increase in avocado volumes.

Despite a 5% decline in average selling prices, gross profit rose 22%, with margins expanding 120 basis points (bps) to 12.6%, underscoring improved cost efficiency and favorable production dynamics. The International Farming segment was a key driver, as strong Peruvian yields and normalized Mexican supply conditions offset prior-year weather impacts, reflecting Mission’s resilient sourcing model and productivity gains.

AVO’s balance sheet fundamentals remain robust. The operating cash flow reached $34 million in the fiscal third quarter, supported by a seasonal working capital release. Net debt-to-EBITDA stood at just 1X, providing flexibility for opportunistic capital allocation. Capital expenditure was primarily directed toward high-return projects like avocado and blueberry expansion in Latin America and a new packhouse in Guatemala, with the total fiscal 2025 capital expenditure expected at $50-55 million. 

The company reaffirmed its trajectory toward moderating capital expenditure and meaningful free cash flow generation in fiscal 2026, a testament to its prudent financial discipline and focus on shareholder value creation.

Segmental performance and diversification are also strengthening AVO’s fundamentals. The International Farming segment’s EBITDA surged 163% year over year to $12.1 million, and the Blueberries segment more than doubled sales to $4.5 million. These results reflect the scalability of Mission Produce’s vertically integrated model and disciplined margin management across categories. Combined with steady international expansion, 37% growth in Europe, and rising Asia penetration, Mission Produce’s fundamentals point to a company executing well on cost control, asset efficiency and multi-market growth, laying a strong foundation for sustainable long-term profitability.

Mission Produce’s Estimate Revision Trend

The Zacks Consensus Estimate for AVO’s fiscal 2025 and 2026 EPS was unchanged in the last 30 days. For fiscal 2025, the Zacks Consensus Estimate for AVO’s sales implies year-over-year growth of 12.1%, while the estimate for EPS indicates a 9.5% fall. The consensus mark for fiscal 2026 sales and earnings suggests year-over-year declines of 9.7% and 28.4%, respectively.

AVO’s Premium Valuation

Mission Produce is currently trading at a forward 12-month P/E multiple of 24.57X, exceeding the industry average of 13.25X.

At 24.57X P/E, Mission Produce trades at a significant premium to its industry peers. The company’s peers, such as Adecoagro, Corteva and Dole, are delivering growth and trade at more reasonable multiples. Adecoagro, Corteva and Dole have forward 12-month P/E ratios of 12.61X, 17.41X and 9.36X — all significantly lower than that of AVO.

Although the current valuation may seem expensive, it suggests that investors have high expectations for AVO's future performance and growth potential. The company’s capability to execute its strategy and capitalize on a favorable pricing environment is essential for ensuring profitability and consistent performance in its Marketing and Distribution segment. While success in these areas can strengthen its market leadership, its failure can pose serious challenges for AVO.

Should Investors Consider Buying AVO Now?

Mission Produce’s recent rally reflects more than short-term optimism; it highlights robust fundamentals and investor confidence in its growth trajectory. Trading above its 200-day moving average, AVO’s technical strength mirrors its improving operations and solid financial base. The company’s vertically integrated model, disciplined execution and expanding global reach continue to drive sustainable growth and margin stability.

While AVO’s premium valuation may seem higher than its peers, it underscores investor trust in its long-term strategy and ability to deliver consistent profitability. Strong cash flows, prudent capital allocation and diversification into new categories, such as blueberries and mangoes, enhance its financial resilience and earnings visibility.

With firm fundamentals, expanding market presence and bullish technical indicators, AVO is well-positioned for continued upside. The stock’s strength and valuation premium signal confidence in its potential, making it an attractive buy for investors seeking long-term growth exposure. The company currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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