'Guacamole is always at parties': why Mission Produce stock is poised for a 30% rise

Avocados have been called the favorite fruit of Americans. The global avocado market will reach $19.8 billion in 2025 and grow to $30.2 billion by 2032, representing a compound annual growth rate (CAGR) of 6.2%, according to Persistence Market Research. However, long before Instagram breakfasts and health promotion, entrepreneur Steve Barnard saw the potential of delicious, ripe avocados and figured out how to capitalize on it. That's how Mission Produce came to be: a company with a capitalization of about $880 million that puts ripe avocados on store shelves.

How Mission Produce works, what risks the company faces and why analysts predict its shares to grow by a third - in Oninvest's material.

Steve Barnard grew up on a farm - his father grew citrus. He always knew he wanted to work in agro-culture - the industry and the community seemed interesting to him. That's why the future entrepreneur spent his free summer vacations working part-time on his father's and neighboring farms, recalls Mission Produce CEO David Meltzer in an interview with journalist David Meltzer. But he was more interested in the business of selling fresh produce such as fruits and vegetables.

Barnard found a company in the fresh produce business in California and arranged a meeting with its director. At the age of 22, Barnard was hired as a loader of lettuce and celery, but was promoted to foreman after three weeks. His workday lasted about 17 hours, with a pre-tax salary of only $120. It was a test, but I didn't care what I was getting paid, I wanted the experience, Barnard says.

Two years later, he took over as director of the harvest team, responsible for 400 employees, three districts and a huge amount of farm equipment.

In 1981, Barnard took over the avocado growing and production department. Barnard quickly saw the potential in selling avocados: together with a business partner, they decided to try building a business, rented a space and hired the first employees at a wage of $10 an hour. "At the time, the avocado supply was higher than the demand in the market: farmers were worried that their fruit wouldn't find a home. It was a great time for vertical integration," Barnard recalls. In the spring of 1983, he says, they attracted their first investment of $900,000. Barnard left his day job and started a new company, Mission Produce.

When asked what makes a business as un-fun as manufacturing interesting, Barnard replies: "Guacamole is always available at parties - and that's our core value."

In the early years, the company rode the wave of what Barnard calls the "avocado revolution".That's when the health benefits of avocados began to be promoted in the U.S. and trade borders between Mexico and the U.S. opened up. This was a turning point for Mission Produce, because avocados are native to Mexico, and that country accounts for more than a third of the world's production of the fruit. That said, the U.S. is the largest buyer of avocados from Mexico, with the states exporting more than 80% of all Mexican avocados.

Mission Produce was unique in that the company was the first to offer retailers the opportunity to purchase ripe fruit ready to eat, writes Produce Business.

The company now has three lines of business:

The vertically integrated model, where the company itself is the grower, supplier and also controls other aspects of the business, such as marketing, increases the operational flexibility of the business, stability of supply and long-term margin potential, Zacks Equity Research writes. The company also diversifies its seasonal risk in this way: when the summer avocado season in California, Peru and Colombia comes to an end, Mission Produce delivers fall avocados from Mexico and Chile.

Mission Produce became a public company in the fall of 2020. The avocado supplier announced an offering of 8 million common shares at a price of $12 - below the original $15-17 range: the company's plans were affected by the coronavirus pandemic, the founder recounted.

Mission Produce's business has indeed been hit hard by the pandemic: most avocados enter the U.S. from Mexico or Peru, trade and travel restrictions have jeopardized the food's ability to actually get to market. As a result, the company ended 2020 with a loss: revenue was down 2% from a year earlier and net income was down 60% to $28.8 million.

In the spring of 2025, the Trump administration threatened to impose a 25% duty on Mexican agricultural products, causing chaos as companies dependent on cross-border trade faced higher prices. According to Mission Produce's second-quarter report, the Company lost $1.1 million in profit because earnings per avocado sold fell due to lower margins.

Despite the fact that goods covered by the trade agreement between the U.S., Mexico and Canada have been exempted from duties, the threat of new fees remains: they could lead to reduced supplies and higher prices, as part of the costs will be shifted to producers, importers and consumers, said Freedom Broker investment analyst Raimzhan Baiterek.

The defense for Mission is diversification: the company grows avocados and mangoes in Peru, Colombia and Guatemala and can partially offset possible disruptions from Mexico, the analyst said.

As of August 21, 2025, Mission Produce shares were worth about $12.5 - about 4% above the offering price, which the founder deemed unsuccessful. However, over the past 12 months, their value has added nearly 20%. For the second quarter of 2025, the company reported record revenues, up 28% to $380.3 million. Adjusted net income more than halved to $3.1 million.

From a valuation perspective, Mission's stock is trading at a high multiple: according to FactSet, Mission's projected price-to-earnings (P/E) ratio is about 20.3, well above the industry average (14.9). The company's EV/Sales ratio is 0.71, which is also above the industry average of 0.5. Despite this, the company's securities rose 17.2% between early Ma and the end of July, outperforming the S&P 500 index, which gained 14.4% and the agricultural products industry (15.94%), Freedom Broker notes.

The short-term challenge for Mission Produce remains U.S. trade policy. According to Bloomberg Intelligence, 90% of avocados consumed in the U.S. are imported from Mexico, as are 86% of tomatoes and virtually all strawberries, so duties on products from Mexico could sharply raise prices and disrupt supplies, Freedom Broker notes.

Meanwhile, the avocado and mango sector continues to grow due to consumer interest in healthy eating, but its dynamics are determined by the balance between increased production and geopolitical risks. Companies with global supply chains, such as Mission Produce, are in a better position to manage these threats, emphasizes analyst Baiterek of Freedom Broker.

The company also has a positive consensus forecast from two analysts with a buy recommendation on Mission shares and a target price of $17, MarketWatch indicated. That means the company's stock could rise about 35%. In late July, Zacks added the company's stock to its Zacks Rank list, which also means a buy recommendation.

This article was AI-translated and verified by a human editor