Why Calavo (CVGW) Shares Are Rising Today

Recent Developments

Calavo Growers (NASDAQ:CVGW), a company specializing in fresh produce, saw its stock price surge by 12.2% during the afternoon trading session following the announcement of its acquisition by Mission Produce (AVO), a leading avocado producer. The deal involves both cash and stock components.

According to the agreement, Calavo shareholders will receive $27 per share, made up of $14.85 in cash and 0.9790 shares of Mission Produce for each Calavo share owned. This offer represents a 26% premium over Calavo’s average share price over the past 30 days, suggesting a strong valuation for investors. The companies expect the merger to result in annual cost savings of $25 million. Although Calavo also released its fourth-quarter earnings—which did not meet analyst forecasts—the acquisition news took center stage. Once the transaction is finalized, anticipated by August 2026, Calavo investors will hold approximately 19.7% of the merged company.

Market Response and Performance

Historically, Calavo’s stock has shown limited volatility, with only eight instances of price swings greater than 5% in the past year. This recent jump is unusual and highlights the significant impact of the acquisition news on market sentiment.

The most notable movement in the last year occurred seven months ago, when Calavo’s shares plummeted by 17.3% after the company reported disappointing results for the first quarter of fiscal 2025. The company missed Wall Street’s expectations across key metrics, including revenue, operating income, and earnings per share.

Revenue growth was supported by increased average avocado prices, which helped counterbalance a drop in sales volume. The decline in volume was linked to limited supply from Mexico and delays in USDA inspections. Looking forward, management anticipates a rebound in volume, fueled by new client acquisitions, expanded partnerships with existing customers, and a robust California avocado season. Despite these positive signs, the quarter’s results left room for improvement.

Since the start of the year, Calavo’s stock has climbed 16.3%. However, at $25.36 per share, it remains about 10% below its 52-week high of $28.18 reached in April 2025. For perspective, an investor who put $1,000 into Calavo shares five years ago would now have an investment valued at $346.02.