Lavoro (NASDAQ:LVRO) versus S&W Seed (NASDAQ:SANW) Critical Review

Lavoro (NASDAQ:LVRO) and S&W Seed (NASDAQ:SANW) are both small-cap consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Profitability

This table compares Lavoro and S&W Seed’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lavoro	N/A	N/A	N/A
S&W Seed	-85.38%	-50.81%	-17.71%

Volatility and Risk

Lavoro has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500. Comparatively, S&W Seed has a beta of 1.82, suggesting that its share price is 82% more volatile than the S&P 500.

Valuation & Earnings

This table compares Lavoro and S&W Seed”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lavoro	$9.08 billion	0.03	-$152.49 million	($1.63)	-1.31
S&W Seed	$54.99 million	0.02	-$30.03 million	($14.24)	-0.03

S&W Seed has lower revenue, but higher earnings than Lavoro. Lavoro is trading at a lower price-to-earnings ratio than S&W Seed, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

2.5% of Lavoro shares are held by institutional investors. Comparatively, 61.7% of S&W Seed shares are held by institutional investors. 11.4% of S&W Seed shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Lavoro and S&W Seed, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lavoro	2	1	0	0	1.33
S&W Seed	0	0	1	0	3.00

Lavoro currently has a consensus target price of $3.4375, indicating a potential upside of 61.08%. S&W Seed has a consensus target price of $25.00, indicating a potential upside of 6,315.19%. Given S&W Seed’s stronger consensus rating and higher probable upside, analysts clearly believe S&W Seed is more favorable than Lavoro.

Summary

S&W Seed beats Lavoro on 8 of the 14 factors compared between the two stocks.

About Lavoro

Lavoro Limited operates as an agricultural inputs retailer. The company operates through three segments: Brazil Cluster, LATAM Cluster, and Crop Care Cluster. It distributes agricultural inputs, such as crop protection, seeds, fertilizers, foliar fertilizers, biologicals, adjuvants, organominerals, 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 channel. Lavoro Limited was founded in 2017 and is headquartered in São Paulo, Brazil.

About S&W Seed

S&W Seed Co. engages in the breeding, production, and sale of stevia and alfalfa seeds. The company was founded in 1980 and is headquartered in Longmont, CO.