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Local Bounti Corporation (LOCL)
NYSE:LOCL
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Local Bounti Corporation
(NYSE:LOCL)
45Neutral
Positive Factors
Capital Partnerships
Two major new capital partnerships appear imminent to improve the balance sheet and expand production in a non-dilutive manner.
Gross Margins
Adjusted Gross Margins of 32% exceeded the 30% estimate, highlighting a critical outperformance in the company's path to EBITDA profitability.
Revenue Growth
Revenue is expected to ramp from $27M to $53M and $100M+, driving adjusted Gross Margins up and bringing EBITDA from a $34M burn to positive territory.
Negative Factors
Q3 Performance
Q3’24 results fell below expectations with a sequential ramp being delayed by 3-6 months due to shifts in SKU offerings.
Revenue Growth Expectations
50% revenue growth YoY was solid but fell below expectations.
Revenue Outlook
The Q4’24 outlook was lowered as full-year revenue guidance was taken down from $50M+ to $39M.
Local Bounti Corporation (LOCL) vs. S&P 500 (SPY)
Market Cap
$18.00M
Dividend YieldN/A
Average Volume (3M)8.29K
Price to Earnings (P/E)―
Beta (1Y)3.95
Revenue Growth27.83%
EPS Growth-59.70%
CountryUS
Employees301
SectorConsumer Defensive
Sector Strength67
IndustryAgricultural Farm Products
Share Statistics
EPS (TTM)-18.00
Shares Outstanding8,655,669
10 Day Avg. Volume10,158
30 Day Avg. Volume8,289
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.47
Price to Cash Flow (P/CF)-0.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.00Price Target Upside380.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Local Bounti Corporation Business Overview & Revenue Model
Company DescriptionLocal Bounti Corporation (LOCL) is an innovative agriculture company specializing in the development and operation of controlled environment agriculture (CEA) facilities. The company focuses on producing high-quality, sustainable, and locally grown leafy greens and herbs utilizing advanced hydroponic and vertical farming techniques. By leveraging cutting-edge technology and a commitment to sustainability, Local Bounti aims to provide fresh produce to consumers while reducing environmental impact and resource usage.
How the Company Makes MoneyLocal Bounti Corporation generates revenue primarily through the sale of its fresh produce, which includes a variety of leafy greens and herbs. The company supplies its products to grocery retailers, wholesalers, food service providers, and direct-to-consumer channels. By using controlled environment agriculture, Local Bounti can produce high-yield crops year-round, ensuring a consistent supply to its clients. Additionally, the company's focus on sustainability and local production allows it to capitalize on consumer trends favoring fresh, locally sourced, and environmentally friendly food products. Strategic partnerships with retail chains and distributors further enhance its market presence and revenue potential.
Local Bounti Corporation Financial Statement Overview
Summary
Local Bounti Corporation has shown strong revenue growth, but struggles with profitability and financial stability. The income statement reveals significant operational challenges with negative margins, while the balance sheet indicates insolvency due to negative stockholders' equity and high debt levels. Cash flows remain negative, highlighting liquidity risks.Income Statement
Local Bounti Corporation has demonstrated significant revenue growth, increasing from $27.56M in 2023 to $34.93M in 2024 TTM, a growth rate of 26.8%. However, the company struggles with profitability, as indicated by a negative gross profit margin of 0.3% and a substantial net loss. The EBIT and EBITDA margins also remain deeply negative, reflecting ongoing operational challenges.35
Negative
Balance Sheet
The balance sheet shows a concerning financial structure, with a negative stockholders' equity of -$65.61M as of 2024 TTM, indicating insolvency. The debt-to-equity ratio cannot be calculated due to negative equity, but the high total debt level of $398.84M suggests significant financial leverage. The equity ratio is also negative, further emphasizing financial instability.20
Very Negative
Cash Flow
Operating cash flow remains negative at -$35.46M for the 2024 TTM, with free cash flow also negative at -$153.11M. This indicates poor cash management and inadequate cash generation from operations. The company exhibits a slight improvement in operating cash flow compared to the previous year, but the overall cash flow position remains weak, posing liquidity risks.30
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 34.93M | 27.56M | 19.47M | 638.00K | 82.00K | 0.00 | Gross Profit |
| 103.00K | 2.22M | 2.21M | 206.00K | -9.00K | 0.00 | EBIT |
| -57.16M | -116.91M | -94.53M | -44.72M | -7.92M | -3.37M | EBITDA |
| -84.97M | -85.14M | -83.91M | -50.28M | -7.60M | 0.00 | Net Income Common Stockholders |
| -149.20M | -124.02M | -100.64M | -55.78M | -8.93M | -3.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.14M | 10.33M | 13.67M | 96.66M | 45.00K | 2.14M | Total Assets |
| 0.00 | 381.75M | 278.74M | 143.93M | 9.10M | 5.89M | Total Debt |
| 0.00 | 327.42M | 120.08M | 11.20M | 154.00K | 2.50M | Net Debt |
| 2.14M | 317.10M | 106.42M | -85.46M | 109.00K | 360.00K | Total Liabilities |
| 0.00 | 366.48M | 157.41M | 42.25M | 11.67M | 3.33M | Stockholders Equity |
| 2.55M | 15.27M | 121.33M | 101.68M | -2.57M | 2.55M |
| Cash Flow | Free Cash Flow | ||||
| -153.11M | -195.42M | -130.64M | -49.77M | -7.26M | -4.86M | Operating Cash Flow |
| -35.46M | -33.16M | -48.81M | -20.11M | -3.84M | -1.12M | Investing Cash Flow |
| -117.65M | -162.26M | -172.38M | -29.67M | -3.42M | -3.74M | Financing Cash Flow |
| 141.58M | 187.38M | 145.05M | 150.81M | 5.17M | 7.00M |
Local Bounti Corporation Technical Analysis
Negative
2.08
Price Trends
2.19
Negative
2.08
Negative
2.38
Negative
Market Momentum
-0.06
Positive
43.70
Neutral
34.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOCL, the sentiment is Negative. The current price of 2.08 is below the 20-day moving average (MA) of 2.15, below the 50-day MA of 2.19, and below the 200-day MA of 2.38, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 43.70 is Neutral, neither overbought nor oversold. The STOCH value of 34.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOCL.
Local Bounti Corporation Risk Analysis
Local Bounti Corporation disclosed 55 risk factors in its most recent earnings report. Local Bounti Corporation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Local Bounti Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $20.55B | 13.83 | -10.11% | 7.30% | 1.62% | 5.62% | |
46 Neutral | $3.29B | ― | 4.98% | 4.63% | 3.61% | 94.27% | |
45 Neutral | $18.00M | ― | -2448.28% | ― | 27.83% | -59.70% | |
45 Neutral | $75.11M | ― | -12.88% | ― | 17.71% | -10.34% | |
43 Neutral | $68.38M | ― | -33.74% | ― | -16.39% | -9.08% | |
39 Underperform | $41.26M | ― | -438.92% | ― | -42.61% | 91.66% | |
32 Underperform | $10.11M | ― | -25.94% | ― | -16.02% | -1.84% |
* Consumer Defensive Sector Average
Performance Comparison
LOCL
Local Bounti Corporation
2.02
-0.82
-28.87%
SMG
Scotts Miracle-Gro Company
54.76
-14.29
-20.70%
GRWG
GrowGeneration
1.11
-1.79
-61.72%
VFF
Village Farms International
0.63
-0.75
-54.35%
HYFM
Hydrofarm Holdings Group
2.02
-8.08
-80.00%
AGFY
Agrify
20.42
15.02
278.15%
Local Bounti Corporation Earnings Call Summary
Earnings Call Date: Nov 14, 2024 | % Change Since: -11.11% | Next Earnings Date: Mar 31, 2025
Earnings Call Sentiment Neutral
The call highlighted significant sales growth and improvements in gross margin, alongside strategic expansions and strengthening commercial relationships. However, these positives were tempered by shortfalls in expected sales and revenue contributions from new facilities, alongside increased R&D expenses. The company is focused on strategic realignment to optimize future growth and profitability.Highlights
Significant Sales Growth
Local Bounti delivered sales of $10.2 million in Q3 2024, marking an increase of approximately 50% year-over-year.
Adjusted Gross Margin Improvement
Adjusted gross margin reached 32% in the third quarter, reflecting a 300 basis point sequential improvement from the second quarter.
Expansion of Product Portfolio
The introduction of high-velocity products like Arugula and Spinach has generated significant customer interest, contributing to the company's strategy to drive growth and improve unit economics.
Strengthening Commercial Relationships
Local Bounti is expanding its presence with key retailers like Sam's Club, Brookshire Grocery Company, and H-E-B, enhancing its market position.
Lowlights
Shortfall in Expected Sales
Sales results fell short of expectations due to strategic reconfiguration of growing plans to meet customer demand, delaying the timeline for achieving positive adjusted EBITDA to Q2 2025.
Revenue Contribution from Texas Facility
The Texas facility's revenue contribution was lower than expected due to the ongoing project to realign production mix, with optimized run rates anticipated by early Q2 2025.
Increased R&D Expenses
R&D expenses increased to $7.1 million in Q3 2024, up by $2.1 million from the prior year, related to scaling up new product production.
Company Guidance
During Local Bounti's Q3 2024 earnings call, CEO Craig Hurlbert and CFO Kathleen Valiasek provided detailed guidance on the company's strategic initiatives and financial performance. The company reported a 50% year-over-year increase in sales, reaching $10.2 million, although this was below expectations due to strategic reconfigurations in their product offerings. They are focusing on high-demand specialty products like Arugula and Spinach, which will shift their timeline for achieving positive adjusted EBITDA to Q2 2025. Adjusted gross margins improved to 32%, reflecting operational efficiencies and product optimization efforts. The company continues to expand its commercial relationships, now shipping to over 180 Brookshire Grocery locations and fulfilling agreements with Sam's Club. For Q4 2024, Local Bounti expects revenues of approximately $11 million, driven by increased production at its Washington and Texas facilities and the introduction of new products. The company remains focused on aligning capacity with customer demand, optimizing its capital structure, and is actively engaged with multiple financing partners to support its strategic goals.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.