Limoneira Co Stock Upgraded (LMNR)

NEW YORK ( TheStreet) -- Limoneira (Nasdaq: LMNR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally poor debt management and premium valuation.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 24.3%. Since the same quarter one year prior, revenues rose by 28.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LIMONEIRA CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LIMONEIRA CO increased its bottom line by earning $0.12 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus $0.12).
  • Currently the debt-to-equity ratio of 1.77 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, LMNR maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.

Limoneira Company engages in agribusiness and real estate development businesses primarily in the United States. The Company operates in three reportable operating segments; Agribusiness, Rental Operations, and Real Estate Development. The company has a P/E ratio of 64.9, equal to the average food & beverage industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Limoneira has a market cap of $181.6 million and is part of the consumer goods sector and food & beverage industry. Shares are up 11.4% year to date as of the close of trading on Tuesday.

You can view the full Limoneira Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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