National Beverage (FIZZ) Could Be 18% Below Fair Value As Valuation Questions Linger

Recent Share Performance and Business Snapshot

Recent trading in National Beverage (FIZZ) has drawn attention after the stock moved about 2.2% higher in the latest session, with shorter term gains contrasting with longer term declines.

Over the past week the share price is up about 6.6%, with an increase of roughly 7.7% over the past month. Over the past 3 months, however, the stock has declined about 7.2% and the total return over the past year is down about 15.6%.

National Beverage develops, produces, markets, and sells sparkling waters, juices, energy drinks, and carbonated soft drinks across the United States and Canada. Its portfolio includes LaCroix sparkling water, Clear Fruit non carbonated water, Rip It energy drinks, Everfresh and Mr. Pure juices, and Shasta and Faygo soft drinks.

The company reports annual revenue of about US$1.18b and net income of about US$183.65m. Reported annual revenue growth is 1.66%. All revenue is attributed to its beverage development, production, marketing, and sales activities and is reported as generated in the United States.

See our latest analysis for National Beverage.

At a latest share price of US$33.07, National Beverage has seen short term momentum improving, while the 1 year total shareholder return remains negative, which points to fading longer term confidence compared with recent trading interest.

If you are comparing FIZZ with other opportunities in consumer brands and beverages, it can help to widen your search and review 20 top founder-led companies

Bulls point to National Beverage’s recent rebound and steady US$1.18b revenue as support for a stronger valuation. Bears highlight the 1-year share decline of nearly 16%. Which side does the current pricing appear to favor next?

Preferred P/E Multiple for National Beverage: Is it justified?

On a P/E basis, National Beverage looks slightly cheap compared with its peer group, even after the recent move to a last close of $33.07.

The P/E multiple of 16.5x reflects how much investors are currently paying for each dollar of National Beverage earnings. For a beverage company with established brands and steady net income of about $183.65m, this is a central yardstick for how the market is valuing its profit stream.

Statements indicate that National Beverage is viewed as good value at this level compared with both the global beverage industry P/E of 16.9x and a much higher peer average of 65.3x. That suggests the market price is not assigning a premium to the company despite its 28.9% return on equity and earnings profile.

Compared with peers and the broader beverage industry, the current 16.5x P/E points to a more restrained valuation for National Beverage, even as its board and management are described as seasoned and experienced. For investors cross checking consumer stocks, this kind of discount can be a useful reference point alongside cash flow based estimates and business quality metrics.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-earnings of 16.5x

However, recent share declines over 1 and 3 years, along with a modest 1.66% annual revenue growth rate, could challenge the case for a higher multiple.

Find out about the key risks to this National Beverage narrative.

Another View on National Beverage’s Value

The P/E comparison paints National Beverage as reasonably priced. A different lens comes from our DCF model, which suggests the stock is trading about 18.4% below an estimated future cash flow value of roughly $39.67 per share. That points to a potential valuation gap. Is this a margin of safety or a sign the model is too optimistic?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out National Beverage for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 48 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With sentiment on National Beverage still mixed, it makes sense to move quickly and test the numbers yourself rather than rely on headlines alone. To see what has investors optimistic about its potential rewards, review the 1 key reward

Looking for more investment ideas beyond National Beverage?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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