Why Limoneira (LMNR) Stock Is Gaining In After-Hours Trading Today

NEW YORK (TheStreet) -- Limoneira (LMNR) shares are up 5% to $25.50 in after hours trading on Tuesday after increasing its full year operating income guidance to between $12.6 million and $13.7 million from its previous forecast of $10.6 million to $11.8 million.

The agribusiness and real estate development company also raised its full year EPS range to between 57 cents and 62 cents per diluted share from its previous forecast of between 45 cents and 50 cents per diluted share.

The improved outlook is due to a continuation of higher lemon prices than previously expected according to the company.

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TheStreet Ratings team rates LIMONEIRA CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIMONEIRA CO (LMNR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • LMNR's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 1412.20% to $6.77 million when compared to the same quarter last year. In addition, LIMONEIRA CO has also vastly surpassed the industry average cash flow growth rate of 2.83%.
  • LIMONEIRA CO's earnings per share declined by 21.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LIMONEIRA CO increased its bottom line by earning $0.32 versus $0.26 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus $0.32).
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that LMNR's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Food Products industry and the overall market, LIMONEIRA CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: LMNR Ratings Report

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