Core Viewpoint - Cal-Maine Foods (NASDAQ: CALM) is positioned as an undervalued company with significant cash reserves, recent acquisitions, and potential for organic growth in value-added products, suggesting a target price of approximately $144 per share based on financial modeling [1][11][31]. Financial Performance - The company reported free cash flow (FCF) growth from $60 million in 2014 to approximately $549 million in 2023, indicating strong financial health and growth potential [29][30]. - Cal-Maine Foods trades at a low valuation of about 6x TTM EBITDA, compared to industry peers that trade at around 11x TTM EBITDA, highlighting substantial room for valuation improvement [12][14]. Growth Strategy - The company plans to pursue selective acquisitions to enhance its market reach and expand its cage-free shell egg production capabilities, with recent acquisitions including assets from Fassio Egg Farms and ISE America, Inc. [29][10]. - There is a focus on organic growth through value-added products such as hard-cooked eggs, which are expected to leverage existing distribution channels and expand into new markets [31][1]. Market Position - Cal-Maine Foods is the largest producer and distributor of shell eggs in the United States, with total assets increasing from $1.1 billion in 2014 to $2.1 billion in 2024, reflecting a strong asset growth trajectory [18][25]. - The company has maintained a negative net debt position, indicating a strong balance sheet and financial flexibility for future growth initiatives [27][11]. Valuation Insights - A discounted cash flow model suggests an implied equity valuation of approximately $7 billion, supporting the target price of $144 per share based on future growth assumptions [11][31]. - The tangible book value per share has increased significantly from $11 in 2014 to $35 in 2024, indicating a solid foundation for future stock price growth [28].

Financial Performance - For the fiscal year ending June 1, 2024, net income attributable to Cal-Maine Foods, Inc. was $277.888 million, a decrease from $758.024 million in the previous fiscal year, representing a decline of approximately 63.4%[12]. - Basic net income per common share for fiscal 2024 was $5.70, down from $15.58 in fiscal 2023, indicating a decrease of about 63.4%[12]. - Total net revenue for fiscal 2024 was $2.326 billion, a decrease from $3.146 billion in fiscal 2023, representing a decline of approximately 26.0%[65]. - The company reported a gross profit margin of 23.3% for fiscal 2024, down from 38.0% in fiscal 2023[145]. - Operating income fell to $312.5 million in fiscal 2024, down from $967.7 million in fiscal 2023, indicating a decline of approximately 67.7%[152]. - The company reported a basic net income per share of $5.70 for the fiscal year ending June 1, 2024, down from $15.58 in the previous year[199]. - Comprehensive income attributable to Cal-Maine Foods, Inc. was $279,001 for the fiscal year ending June 1, 2024, compared to $756,734 in the prior year, indicating a substantial decline[202]. Sales and Revenue Composition - Cage-free egg revenue represented approximately 29.5% of total net shell egg sales for fiscal year 2024[31]. - Specialty eggs, including cage-free, organic, and free-range, are a significant and growing segment, with total specialty egg sales accounting for 39.8% of revenue in 2024[33]. - Egg product sales constituted approximately 3.8% of total revenue in fiscal 2024[32]. - Specialty shell egg sales accounted for 41.4% of total net sales in fiscal 2024, compared to 31.6% in fiscal 2023, indicating a shift towards higher-margin products[147]. - The average net selling price of shell eggs decreased by 34% in fiscal 2024 compared to fiscal 2023, with the average UB southeastern large index price at $1.932[143]. Production and Capacity - The total flock as of June 1, 2024, consisted of approximately 39.9 million layers and 11.8 million pullets and breeders[25]. - The company has a production capacity of up to 48.0 million layers across 43 shell egg production facilities[123]. - The company operates 26 feed mills with a production capacity of 949 tons of feed per hour[123]. - The company has 44 processing and packaging facilities with a capacity of approximately 605,700 dozen shell eggs per hour[123]. - The company has ongoing construction projects aimed at expanding its cage-free egg production capabilities, expected to phase into production through fiscal 2026[124]. Market and Competitive Landscape - The company sold shell eggs and egg products in 39 states and Puerto Rico, utilizing an extensive distribution network[46]. - The ten largest producers owned approximately 54% of industry table egg layer hens at the end of 2023[48]. - Fresh shell eggs accounted for 96.1% to 96.6% of the company's net sales over the last three fiscal years, indicating a highly competitive market[103]. - Increased competition in the shell egg market could lead to price reductions and loss of market share, negatively impacting financial results[103]. Legal and Regulatory Matters - The company is involved in ongoing legal proceedings related to alleged violations of the Texas Deceptive Trade Practices Act, with a trial date tentatively set for August 11, 2025[16]. - The jury awarded the Egg Products Plaintiffs $17.8 million in damages, which could lead to a total liability of $53.3 million if treble damages are applied[72]. - The Company recorded an accrued expense of $19.6 million in selling, general and administrative expenses related to the Egg Products litigation[72]. - The court found the defendants liable for state law nuisance and federal common law nuisance in the Oklahoma Watershed Pollution Litigation, but no penalties were assessed[73]. - The Company has a reasonable possibility of a material loss from the Oklahoma litigation, but the monetary exposure cannot be estimated at this time[73]. Employee and Labor Matters - As of June 1, 2024, the company employed 3,067 individuals, with 2,370 in egg production, processing, and marketing[52]. - Approximately 76% of employees are paid at hourly rates above the federal minimum wage, with the company covering about 82% of health plan costs[55]. - Approximately 76% of the company's employees are paid at hourly rates, often in entry-level positions, which could lead to increased labor costs due to rising minimum wage requirements[105]. - Labor costs increased primarily due to the pandemic, with continued wage rises expected in fiscal 2023 and 2024 due to inflation and low unemployment[105]. Financial Position and Capital Management - The company aims to maintain a strong balance sheet and liquidity to support growth opportunities and stockholder returns, focusing on dividends, acquisitions, and capital expenditures[153]. - Working capital increased to $1.0 billion as of June 1, 2024, compared to $942.2 million at June 3, 2023, while the current ratio decreased to 5.5 from 6.2[160]. - The company has a Credit Facility with an initial aggregate principal amount of up to $250 million, with no amounts borrowed as of June 1, 2024[90]. - The company has a maximum Total Funded Debt to Capitalization Ratio of no greater than 50% as per the Credit Agreement[90]. Risks and Challenges - Consumer demand for shell eggs may decline due to adverse publicity and changing dietary trends, which could materially affect future financial results[94]. - Feed costs represent 55% to 63% of total farm production costs over the last five fiscal years, and volatility in these costs can adversely impact operations and cash flow[94]. - The company experienced HPAI outbreaks leading to the depopulation of 3.1 million laying hens and 577,000 pullets, which could negatively impact financial results if such outbreaks continue[96]. - Global health crises, such as pandemics, could disrupt operations and adversely affect financial results due to increased costs and supply chain disruptions[101]. - Legal proceedings may expose the company to significant liabilities, adversely affecting business reputation and financial condition[110]. Corporate Governance and Management - The company is controlled by the family of the late founder, holding approximately 52.0% of the total voting power, which may affect corporate governance and decision-making[105]. - The company has a crisis management plan in place to respond to cybersecurity incidents, ensuring minimal disruption to operations[114]. - The company is governed by a Board responsible for overseeing management's risk mitigation processes related to cybersecurity threats[120]. Acquisitions and Growth Strategy - The growth strategy focuses on strategic acquisitions, organic growth, and expansion of value-added products, including hard-cooked eggs[50]. - The Company acquired assets of ISE America, Inc. for approximately $110 million, which includes facilities for 4.7 million laying hens and a customer distribution network across the Northeast and Mid-Atlantic states[76]. - The company completed the acquisition of Fassio Egg Farms, Inc. in September 2023, enhancing its market presence in Utah and the western U.S.[138]. - The company plans to pursue selective acquisitions to expand cage-free shell egg production capabilities, which may involve risks related to demand estimation and integration[101].

[Cal-Maine Foods Fourth Quarter and Fiscal 2024 Earnings Release](index=1&type=section&id=Cal-Maine%20Foods%20Fourth%20Quarter%20and%20Fiscal%202024%20Earnings%20Release) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Cal-Maine Foods reported solid Q4 results with increased net income and lower production costs, despite a fiscal year sales decline driven by lower egg prices, while strategically expanding through acquisitions [Q4 & Fiscal Year 2024 Performance Summary](index=1&type=section&id=Q4%20%26%20Fiscal%20Year%202024%20Performance%20Summary) Cal-Maine Foods reported Q4 net sales of $640.8 million and net income of $113.2 million, with fiscal year net sales of $2.3 billion and net income of $277.9 million, alongside a $0.77 per share dividend Q4 & Fiscal Year 2024 Key Financial Metrics | Metric | Fourth Quarter 2024 | Fiscal Year 2024 | | :--- | :--- | :--- | | **Net Sales** | $640.8 million | $2.3 billion | | **Net Income** | $113.2 million | $277.9 million | | **Diluted EPS** | $2.32 | $5.69 | | **Cash Dividend** | $0.77 per share | N/A | [Sales and Operating Performance](index=1&type=section&id=Sales%20and%20Operating%20Performance) Q4 net sales declined due to a shorter quarter, while full-year sales dropped due to lower conventional egg prices, though specialty egg volumes grew and profitability improved significantly from lower feed costs - Q4 sales revenue declined due to a shorter quarter, while the fiscal year sales decrease was primarily driven by lower net average selling prices for conventional eggs compared to fiscal 2023 record highs[5](index=5&type=chunk)[7](index=7&type=chunk) - Farm production costs per dozen decreased by **14.3% in Q4** and **8.3% in fiscal 2024**, primarily due to more favorable feed ingredient costs, with feed costs per dozen down **24.9% in Q4** and **18.6% for the full year**[7](index=7&type=chunk) Operating Metrics Per Dozen | Operating Metric (per dozen) | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | **Net Average Selling Price** | $2.133 | $2.197 | -2.9% | | **Conventional Egg Price** | $2.062 | $2.038 | +1.2% | | **Specialty Egg Price** | $2.254 | $2.499 | -9.8% | | **Feed Cost** | $0.504 | $0.671 | -24.9% | Sales Volume (Million Dozens) | Sales Volume (million dozens) | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | **Total Dozens Sold** | 285.6 | 296.6 | -3.7% | | **Conventional Dozens Sold** | 180.5 | 194.0 | -7.0% | | **Specialty Dozens Sold** | 105.0 | 102.5 | +2.5% | [Strategic Initiatives and Acquisitions](index=1&type=section&id=Strategic%20Initiatives%20and%20Acquisitions) Cal-Maine Foods pursued its growth strategy by completing three key acquisitions, including Fassio Egg Farms and ISE America, Inc., to enhance market presence and expand shell egg production - The company completed three key acquisitions to complement organic growth, including Fassio Egg Farms, a former Tyson Foods facility for repurposing, and ISE America, Inc. post-fiscal year-end[4](index=4&type=chunk) - The acquisition of ISE America's assets is a strategic move to significantly enhance market reach in the Northeast and Mid-Atlantic states[4](index=4&type=chunk) [Business Environment and Outlook](index=2&type=section&id=Business%20Environment%20and%20Outlook) The company navigates HPAI outbreaks by repopulating affected farms, anticipates strong shell egg demand in fiscal 2025, and plans to expand specialty and cage-free production while maintaining financial strength for growth [HPAI Impact and Supply Outlook](index=2&type=section&id=HPAI%20Impact%20and%20Supply%20Outlook) HPAI remains a significant industry challenge, impacting Cal-Maine Foods' Kansas and Texas facilities with depopulation of approximately **3.1 million laying hens** and **577,000 pullets**, though repopulation is underway with USDA clearance - Since November 2023, HPAI outbreaks have led to the depopulation of approximately **32.8 million commercial laying hens and pullets** in the U.S[9](index=9&type=chunk) - Cal-Maine Foods' facilities in Kansas and Texas were directly impacted, resulting in the total depopulation of approximately **3.1 million laying hens** and **577,000 pullets**[9](index=9&type=chunk) - The affected company locations have been cleared by the USDA to resume operations, with repopulation anticipated to be finished before the end of the calendar year[9](index=9&type=chunk) [Fiscal 2025 Outlook](index=3&type=section&id=Fiscal%202025%20Outlook) For fiscal 2025, Cal-Maine Foods anticipates continued strong shell egg demand, focusing on expanding specialty and cage-free production, and leveraging its financial strength for internal growth and strategic acquisitions - Management believes shell egg demand will remain strong in fiscal 2025, with consumers favoring them as an affordable protein source[12](index=12&type=chunk) - The company will continue to focus on expanding production of specialty and cage-free eggs to meet consumer demand trends[12](index=12&type=chunk) - Cal-Maine Foods has the financial strength to fund internal expansion projects and consider strategic acquisitions to support growth[12](index=12&type=chunk) [Shareholder Returns](index=3&type=section&id=Shareholder%20Returns) In line with its variable dividend policy, Cal-Maine Foods declared a cash dividend for Q4 fiscal 2024, paying out one-third of quarterly net income to shareholders [Dividend Declaration](index=3&type=section&id=Dividend%20Declaration) The company will pay a cash dividend of approximately **$0.77 per share** for Q4 fiscal 2024, payable on August 20, 2024, to shareholders of record as of August 5, 2024 Dividend Declaration Details | Dividend Information | Detail | | :--- | :--- | | **Dividend per Share** | ~$0.77 | | **Record Date** | August 5, 2024 | | **Payable Date** | August 20, 2024 | [Financial Statements](index=5&type=section&id=Financial%20Statements) Unaudited financial statements show decreased annual net sales and net income for fiscal 2024, with a slight Q4 net income increase, and a stronger balance sheet reflecting increased cash, total assets, and stockholders' equity [Summary Statements of Income](index=5&type=section&id=Summary%20Statements%20of%20Income) For fiscal year 2024, net sales were **$2.33 billion** and net income **$277.9 million**, both down from fiscal 2023, while Q4 net sales were **$640.8 million** with net income slightly increasing to **$113.2 million** Summary Statements of Income (In thousands) | (In thousands) | Q4 FY2024 | Q4 FY2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $640,789 | $688,680 | $2,326,443 | $3,146,217 | | **Gross profit** | $186,436 | $198,092 | $541,571 | $1,196,457 | | **Operating income** | $142,188 | $136,225 | $312,452 | $967,726 | | **Net income attributable to CALM** | $113,241 | $110,931 | $277,888 | $758,024 | [Summary Balance Sheets](index=6&type=section&id=Summary%20Balance%20Sheets) As of June 1, 2024, Cal-Maine Foods reported a strengthened balance sheet with total assets increasing to **$2.18 billion**, cash and short-term investments rising to **$812.4 million**, and stockholders' equity growing to **$1.80 billion** Summary Balance Sheets (In thousands) | (In thousands) | June 1, 2024 | June 3, 2023 | | :--- | :--- | :--- | | **Cash and short-term investments** | $812,377 | $647,914 | | **Total current assets** | $1,241,839 | $1,124,925 | | **Total assets** | $2,184,761 | $1,954,525 | | **Total current liabilities** | $227,743 | $182,731 | | **Stockholders' equity** | $1,797,043 | $1,609,583 |

Keep reading if you want a detailed review of the performance of these three stocks this year and the factors that have contributed to making them stocks sell immediately. Cal-Maine Foods (NASDAQ:CALM) is the largest producer and supplier of fresh shell eggs in the U.S. The company almost monopolizes the egg-supplying and producing business, evident from its domination across midwestern, southeastern, and southwestern states in America. Unsurprisingly, these regions account for nearly a quarter of the entir ...

Core Viewpoint - Cal-Maine Foods (CALM) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that could lead to increased stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based solely on a company's changing earnings picture, which is a significant factor influencing stock prices [2][4]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, largely driven by institutional investors who adjust their valuations based on these estimates [4][6]. Cal-Maine's Earnings Outlook - For the fiscal year ending May 2024, Cal-Maine is expected to earn $4.51 per share, reflecting a year-over-year decline of 70.9% [8]. - Over the past three months, the Zacks Consensus Estimate for Cal-Maine has increased by 25.7%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Cal-Maine to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for price appreciation in the near term [11].

Investors interested in Basic Materials stocks should always be looking to find the best-performing companies in the group. Cal-Maine Foods (CALM) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question. Cal-Maine Foods is one of 240 companies in the Basic Materials group. The Basic Mate ...

The Basic Materials group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Cal-Maine Foods (CALM) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question.Cal-Maine Foods is a member of the Basic Materials sector. This group includes 240 individual stocks and currently holds a Zacks Sector Rank of #2. The Zacks Sector Rank ...

U.S. stock markets have retreated in April after a sharp rally in the past 15 months. The euphoria surrounding equities evaporated as the yield on the benchmark 10-Year U.S. Treasury Note returned northward, trading above 4%. In the first week of April, the Dow tumbled 2.3%, posting its worst weekly performance in 2024. The S&P 500 slid 1% during the period, while the Nasdaq Composite fell 0.8%.This was primarily owing to the uncertainty regarding the time when the Fed would initiate the first cut in the be ...

Key PointsCal-Maine Foods is the nation's largest fresh egg producer and distributor, with an estimated 19% market share.Cal-Maine reported a fiscal Q3 2024 EPS beat by 55 cents despite revenues falling 29.5% due to bird flu disruptions in egg supply.Cal-Maine shares trade at just 13.6X forward earnings with a $1.00 special dividend payable on May 16, 2024, for shareholders on record as of May 1, 2024.5 stocks we like better than Cal-Maine FoodsCal-Maine Foods Inc. NASDAQ: CALM is the largest and leading pr ...

For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Cal-Maine Foods (CALM) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question.Cal-Maine Foods is a member of our Basic Materials group, which includes 240 different companies and currently sits at #12 in the Zacks Sector Rank. The Zacks Sector Ran ...