Fresh Del Monte Produce has had an impressive run over the past six months as its shares have beaten the S&P 500 by 23.9%. The stock now trades at $41.93, marking a 26.4% gain. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.
Is now the time to buy Fresh Del Monte Produce, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think Fresh Del Monte Produce Will Underperform?
We’re happy investors have made money, but we're cautious about Fresh Del Monte Produce. Here are three reasons you should be careful with FDP and a stock we'd rather own.
1. Long-Term Revenue Growth Flatter Than a Pancake
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Fresh Del Monte Produce struggled to consistently increase demand as its $4.32 billion of sales for the trailing 12 months was close to its revenue three years ago. This wasn’t a great result and is a sign of poor business quality.
2. Revenue Projections Show Stormy Skies Ahead
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Fresh Del Monte Produce’s revenue to drop by 2.9%, a decrease from This projection doesn't excite us and implies its products will face some demand challenges.
3. Low Gross Margin Reveals Weak Structural Profitability
At StockStory, we prefer high gross margin businesses because they indicate pricing power or differentiated products, giving the company a chance to generate higher operating profits.
Fresh Del Monte Produce has bad unit economics for a consumer staples company, signaling it operates in a competitive market and lacks pricing power because its products can be substituted. As you can see below, it averaged a 8.8% gross margin over the last two years. That means Fresh Del Monte Produce paid its suppliers a lot of money ($91.21 for every $100 in revenue) to run its business. 
Final Judgment
Fresh Del Monte Produce falls short of our quality standards. With its shares beating the market recently, the stock trades at 13.7× forward P/E (or $41.93 per share). While this valuation is reasonable, we don’t see a big opportunity at the moment. There are more exciting stocks to buy at the moment. We’d suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
