Egg company Cal-Maine Foods (NASDAQ:CALM) reported Q3 CY2024 results beating Wall Street’s revenue expectations , with sales up 71.1% year on year to $785.9 million. Its GAAP profit of $3.06 per share was 11.2% below analysts’ consensus estimates.

Is now the time to buy Cal-Maine? Find out in our full research report.

Cal-Maine (CALM) Q3 CY2024 Highlights:

• Revenue: $785.9 million vs analyst estimates of $704.7 million (11.5% beat)

• EPS: $3.06 vs analyst expectations of $3.45 (11.2% miss)

• Gross Margin (GAAP): 31.5%, up from 9.9% in the same quarter last year

• Market Capitalization: $3.67 billion

Sherman Miller, president and chief executive officer of Cal-Maine Foods, stated, “Our financial and operating results for the first quarter mark a strong start to fiscal 2025 for Cal-Maine Foods. These results reflect favorable demand for shell eggs during most of the quarter and significantly higher market prices compared with the first quarter last year. At the same time, the national egg supply has declined due to the recent outbreaks of highly pathogenic avian influenza."

Company Overview

Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs.

Perishable Food

The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.

Sales Growth

Cal-Maine carries some recognizable brands and products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the other hand, Cal-Maine can still achieve high growth rates because its revenue base is not yet monstrous.

As you can see below, the company’s annualized revenue growth rate of 24.3% over the last three years was excellent for a consumer staples business.

This quarter, Cal-Maine reported magnificent year-on-year revenue growth of 71.1%, and its $785.9 million in revenue beat Wall Street’s estimates by 11.5%. Looking ahead, Wall Street expects revenue to decline 15.9% over the next 12 months, a deceleration from this quarter.

When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.

Cash Is King

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Cal-Maine has shown terrific cash profitability, enabling it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the consumer staples sector, averaging 18.4% over the last two years.

Key Takeaways from Cal-Maine’s Q3 Results

We were impressed by how significantly Cal-Maine blew past analysts’ revenue expectations this quarter. On the other hand, its EPS missed analysts’ expectations. Overall, this was a mixed quarter. The stock traded up 1.5% to $78 immediately following the results.

So do we think Cal-Maine is an attractive buy at the current price?We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy.We cover that in our actionable full research report which you can read here, it’s free.