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1. Company Snapshot

1.a. Company Description

Lavoro Limited operates as an agricultural inputs retailer.It sells agricultural inputs, including seeds, fertilizers and specialty products, crop protection products, and others for the agricultural industry.The company also produces specialty fertilizers, crop protection products, and biological crop inputs.


It operates in Brazil, Colombia, and Uruguay.The company sells its products through its physical stores and digital.Lavoro Limited was founded in 2017 and is based in Sao Paulo, Brazil.

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1.b. Last Insights on LVRO

Lavoro Limited's recent performance was negatively impacted by supply chain disruptions, necessitating an out-of-court restructuring agreement with key suppliers. The agreement, reached on June 18, 2025, extends payment terms and secures future product supply for a multi-year period, aiming to mitigate further disruptions. This development highlights the company's vulnerability to supply chain issues, which may have compromised its ability to maintain a stable and efficient operations.

1.c. Company Highlights

2. Lavoro's Fiscal 2025 First Quarter Earnings: A Mixed Bag with Recovery Hopes

Lavoro reported a challenging fiscal 2025 first quarter, with consolidated revenue declining 13% year-over-year to BRL2.05 billion, reflecting broader market headwinds. The company incurred a net loss of BRL267.1 million, driven by deferred tax assets and higher finance costs. Adjusted EBITDA fell 5% to BRL54.4 million, weighed down by elevated SG&A expenses. Despite these near-term struggles, management emphasized improving farmer sentiment and favorable weather conditions as potential catalysts for recovery in the second half.

Publication Date: Mar -09

📋 Highlights
  • Crop Care Growth: Crop Care delivered a strong 68% year-over-year revenue increase, driven by Union Agro and Perterra.
  • Brazil Ag Retail Resilience: Brazil Ag Retail reported a 7% gross profit growth despite revenue declines, attributed to credit tightening and input price deflation.
  • Latam Ag Retail Performance: Latam Ag Retail saw a 4% revenue increase, supported by currency appreciation, though adjusted EBITDA declined due to higher costs.
  • Consolidated Financials: Consolidated revenue fell 13% year-over-year to BRL2.05 billion, with a net loss of BRL267.1 million, impacted by deferred tax assets and higher finance costs.
  • Updated FY2025 Guidance: The company revised its FY2025 guidance, expecting consolidated revenue between BRL6.5 billion and BRL7.5 billion, with adjusted EBITDA growth no longer anticipated.

Crop Care and Retail Performance

The Crop Care segment stood out with a robust 68% year-over-year revenue growth, fueled by strong demand for Union Ag and Perterra products. This performance underscores Lavoro's strategic focus on high-margin crop solutions. However, the Brazil Ag Retail division faced revenue declines due to credit tightening and input price deflation, though gross profit grew 7%. Management highlighted that inventory financing disruptions and liquidity constraints remain significant near-term challenges.

Latam Ag Retail and Cost Initiatives

Latam Ag Retail reported a modest 4% revenue increase, benefiting from currency appreciation. However, adjusted EBITDA for the segment declined due to higher costs. To address profitability pressures, Lavoro is implementing cost-saving initiatives, including store consolidations. The company plans to reduce its Brazilian store footprint by around 70 locations, focusing on the most profitable ones to enhance efficiency and reduce fixed costs.

Guidance and Market Outlook

Lavoro updated its FY2025 guidance, projecting consolidated revenue between BRL6.5 billion and BRL7.5 billion, with adjusted EBITDA no longer expected to grow. Management remains cautiously optimistic, noting that supply normalization and improved market conditions could drive a recovery in the second half. Additionally, potential US tariffs on soy products could positively impact Brazilian farmers, though management urged caution given geopolitical uncertainties.

Valuation and Financial Health

Trading at a price-to-sales ratio of 0.34 and an enterprise value-to-EBITDA ratio of 11.52, Lavoro's valuation reflects the market's cautious stance on its near-term prospects. The company's net debt-to-EBITDA ratio of 3.51 highlights the need for disciplined capital management. While the stock's current multiples suggest some risk, the potential for margin improvement and cost savings could warrant a closer look for long-term investors.

3. NewsRoom

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Lavoro (NASDAQ:LVRO) Trading 6.1% Higher – What’s Next?

Dec -02

Source: defenseworld.net

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Lavoro Announces Receipt of Non-Compliance Notice from Nasdaq Regarding Delayed Filing of Form 20-F

Nov -24

Source: globenewswire.com

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Lavoro Announces Receipt of Non-Compliance Notice from Nasdaq Regarding Delayed Filing of Form 6-K Interim Financial Information

Jul -14

Source: globenewswire.com

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Lavoro Limited (LVRO) Q2 2025 Earnings Call Transcript

Jun -20

Source: seekingalpha.com

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Lavoro Restructures Debt, Withdraws FY Outlook

Jun -18

Source: marketwatch.com

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Lavoro Reaches Out-of-Court Restructuring Agreement with Key Suppliers and Reports Certain Preliminary Unaudited Financial Information for Second Quarter of Fiscal 2025

Jun -18

Source: globenewswire.com

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Lavoro Limited (LVRO) Q1 2025 Earnings Call Transcript

Feb -03

Source: seekingalpha.com

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Lavoro Sets Fiscal First Quarter 2025 Earnings Conference Call on February 3rd, 2025

Jan -21

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.88%)

6. Segments

Brazil Cluster

Expected Growth: 10.5%

The Brazil Cluster's growth is driven by increasing e-commerce adoption, fintech innovation, and logistics advancements, fueling economic growth and innovation in Brazil.

LATAM Cluster

Expected Growth: 5.8%

LATAM's growing middle class, increasing urbanization, and government investments in infrastructure are driving demand for Lavoro Limited's services in Mexico, Brazil, and Argentina, with a focus on digital transformation and innovation.

Crop Care Cluster

Expected Growth: 12.4%

Increasing adoption of precision agriculture, growing demand for sustainable farming practices, and government initiatives promoting digital agriculture are driving the growth of the Crop Care Cluster market.

Eliminations

Expected Growth: 5.2%

Consolidation of financial statements drives demand for eliminations, fueled by increasing complexity in corporate structures and regulatory requirements. Growing adoption of IFRS and US GAAP further boosts the need for accurate eliminations, ensuring transparency and compliance.

7. Detailed Products

Cybersecurity Solutions

Comprehensive cybersecurity solutions to protect businesses from cyber threats

Cloud Services

Scalable and secure cloud infrastructure for businesses

Data Analytics

Advanced data analytics tools to drive business insights

IT Consulting

Expert IT consulting services to optimize business operations

Digital Transformation

Comprehensive digital transformation services to drive business growth

Cybersecurity Training

Comprehensive cybersecurity training programs for employees

8. Lavoro Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Lavoro Limited is moderate due to the presence of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of alternative products and services, and the high demand for quality products.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is moderate due to the presence of barriers to entry, such as high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple competitors and the high demand for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.20%
Debt Cost 4.97%
Equity Weight 61.80%
Equity Cost 4.97%
WACC 4.97%
Leverage 61.82%

11. Quality Control: Lavoro Limited passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
China Green Agriculture

A-Score: 5.1/10

Value: 6.7

Growth: 4.3

Quality: 7.4

Yield: 0.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Origin Agritech

A-Score: 4.8/10

Value: 9.2

Growth: 6.4

Quality: 6.4

Yield: 0.0

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

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Intrepid Potash

A-Score: 4.1/10

Value: 7.6

Growth: 1.8

Quality: 3.5

Yield: 0.0

Momentum: 7.5

Volatility: 4.3

1-Year Total Return ->

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Grupa Azoty

A-Score: 3.3/10

Value: 8.0

Growth: 3.3

Quality: 1.0

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Lavoro

A-Score: 2.7/10

Value: 7.4

Growth: 5.3

Quality: 2.1

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Bioceres Crop Solutions

A-Score: 2.1/10

Value: 6.0

Growth: 1.9

Quality: 1.9

Yield: 0.0

Momentum: 0.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.73$

Current Price

0.73$

Potential

-0.00%

Expected Cash-Flows