National Beverage Corp (FIZZ, Financial) has recently experienced a daily loss of 5.57%, with a 3-month performance showing a 1.19% decline. Despite these fluctuations, the company's Earnings Per Share (EPS) stands at 1.68. Investors and analysts are keen to understand, is National Beverage fairly valued in the current market? This article delves into the valuation analysis to provide a clearer picture. Read on for an in-depth assessment of National Beverage's intrinsic value and investment potential.
Company Introduction
National Beverage Corp is a prominent player in the U.S. non-alcoholic beverage industry, known for its focus on functional drinks and the popular LaCroix sparkling water brand. The company boasts a diverse product range including Rip It energy drinks, Everfresh juices, and soda brands like Shasta and Faygo. With a strong grip on its production and distribution processes, National Beverage minimizes outsourcing, utilizing warehouse distribution for large retailers, direct-store delivery for smaller outlets, and food-service distributors for various institutions. At the helm is chairman and CEO Nick Caporella, who holds over 73% of the common stock. With a current stock price of $46.58 and a market cap of $4.40 billion, we compare National Beverage's performance to its Fair Value (GF Value) of $50.06 to gauge its true market value.
Summarize GF Value
The GF Value is a proprietary measure calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. It serves as a benchmark for the stock's fair trading value. If a stock's price significantly deviates from the GF Value Line, it could indicate overvaluation or undervaluation, affecting potential future returns. National Beverage (FIZZ, Financial), with its current share price, appears to be fairly valued. This assessment suggests that the long-term return of its stock should align closely with the company's growth rate.
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Financial Strength
When investing, assessing a company's financial strength is crucial to minimize the risk of capital loss. Key indicators such as the cash-to-debt ratio and interest coverage can provide insights into financial resilience. National Beverage shines with a cash-to-debt ratio of 5.49, outperforming 67.59% of its industry peers. The company's financial strength is further underscored by its strong GuruFocus ranking of 8 out of 10.
Profitability and Growth
A history of consistent profitability is a hallmark of a less risky investment. National Beverage has maintained profitability for the past decade, with an impressive operating margin of 17.86%, ranking above 85.45% of the industry. The company's strong profitability score of 9 out of 10 reflects its robust financial health. Growth, a vital valuation component, is also noteworthy. National Beverage's 3-year average annual revenue growth rate of 5.5% may not lead the industry, but its EBITDA growth rate of 3.9% is competitive, signaling potential for value creation.
ROIC vs WACC
The profitability of a company can be effectively evaluated by comparing its Return on Invested Capital (ROIC) against its Weighted Average Cost of Capital (WACC). National Beverage's ROIC of 55.28 is significantly higher than its WACC of 7.22, indicating efficient cash flow generation and value creation for shareholders.
Conclusion
In summary, National Beverage (FIZZ, Financial) presents itself as a fairly valued investment opportunity. The company's financial condition and profitability are robust, with growth prospects that are more than adequate when compared to industry peers. For a thorough understanding of National Beverage's financial journey, investors are encouraged to review its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
