|
Related Topics
|
Category: BellRing (BRBR)
Date: 21 November 2020 Stock price of BellRing: $21.40 We take a look at the 4th quarter 2020 earnings report of BellRing Brands (BRBR) a fast growing firm active in the convenient nutrition category selling products such as ready to drink protein shakes, powders and nutrition bars. The group reported revenues of $282.6 million and net income of $10 million for the 4th quarter of their 2020 fiscal year.
|
|
International net sales for Dymatize and PowerBar products improved when compared to the third quarter of 2020, but continue to be negatively impacted by changes in consumer behavior as discussed earlier. The trajectory of volume recovery for Dymatize and PowerBar is expected to be impacted by changes in the degree of restrictions on mobility and gathering, including closures of specialty retail stores and gyms. "
More About BellRing Brands
BellRing Brands, Inc. is a rapidly growing leader in the global convenient nutrition category. Its primary brands, Premier Protein®, Dymatize® and PowerBar®, appeal to a broad range of consumers across all major product forms, including ready-to-drink protein shakes, powders and nutrition bars, and are distributed across a diverse network of channels including club, food, drug, mass, eCommerce, specialty and convenience. BellRing’s commitment to consumers is to strive to make highly effective products that deliver best-in-class nutritionals and superior taste
Overview of BellRing's 4th quarter 2020 earnings report
- Fourth quarter net sales of $282.6 million; operating profit of $49.0 million; net earnings available to Class A common stockholders of $10.0 million and Adjusted EBITDA of $56.7 million
- Fiscal year net sales of $988.3 million; operating profit of $164.0 million; net earnings available to Class A common stockholders of $23.5 million and Adjusted EBITDA of $197.2 million
- Fiscal year 2021 net sales and Adjusted EBITDA expected to grow 8%-13% and 5%-10%, respectively, over fiscal year 2020 (resulting in a net sales range of $1.07-$1.12 billion and an Adjusted EBITDA range of $207-$217 million)
BellRing's management commentary 3rd quarter 2020 earnings report
Net sales were $282.6 million, an increase of 31.7%, or $68.1 million, compared to the prior year period. Premier Protein net sales increased 37.2%, with volumes up 40.6%, and Premier Protein ready-to-drink (“RTD”) shake net sales increased 39.8%, with volumes up 46.2%. Premier Protein net sales benefited from RTD shake distribution gains for both existing and new products, incremental promotional activity and lapping a reduction in customer trade inventory levels in the prior year period. Additionally, net sales benefited from an increase in customer trade inventory levels, as RTD shake shipments exceeded consumption driven by certain promotional events and retailer shelf resets that occurred early in the first quarter of 2021. Dollar consumption of Premier Protein RTD shakes increased 20% in the 13-week period ended September 26, 2020 as compared to the same period in 2019 (inclusive of Nielsen Total US xAOC including Convenience and management estimates of untracked channels).
Dymatize net sales increased 14.5%, with volumes increasing 22.1%, as strong growth in eCommerce and in the mass and club channels were partially offset by declines in international. PowerBar net sales increased 1.0%, with volumes declining 13.6%. Dymatize and PowerBar net sales improved when compared to the third quarter of 2020, but the international business continued to be negatively impacted by changes in consumer behavior (primarily lower on-the-go consumption) in response to the COVID-19 pandemic.
Dymatize net sales increased 14.5%, with volumes increasing 22.1%, as strong growth in eCommerce and in the mass and club channels were partially offset by declines in international. PowerBar net sales increased 1.0%, with volumes declining 13.6%. Dymatize and PowerBar net sales improved when compared to the third quarter of 2020, but the international business continued to be negatively impacted by changes in consumer behavior (primarily lower on-the-go consumption) in response to the COVID-19 pandemic.
COVID-19 Commentary
BellRing continues to monitor the impact of the COVID-19 pandemic on its business and remains focused on ensuring its ability to safeguard the health of its employees, including their economic health, maintaining the continuity of its supply chain to serve customers and consumers and preserving financial liquidity to mitigate the uncertainty caused by the pandemic.
The convenient nutrition category continues to be negatively impacted by changes in consumer behavior (primarily lower on-the-go consumption) in response to the COVID-19 pandemic. In the fourth quarter of 2020, the liquids and powders sub-categories returned to growth relatively in line with their pre-pandemic growth rates. However, the bar sub-category continues to experience year-over-year declines. International net sales for Dymatize and PowerBar products improved when compared to the third quarter of 2020, but continue to be negatively impacted by changes in consumer behavior as discussed earlier. The trajectory of volume recovery for Dymatize and PowerBar is expected to be impacted by changes in the degree of restrictions on mobility and gathering, including closures of specialty retail stores and gyms.
As of September 30, 2020, BellRing had $48.7 million in cash and cash equivalents and the available borrowing capacity under its revolving credit facility was $170.0 million.
Outlook
For fiscal year 2021, BellRing management expects net sales and Adjusted EBITDA to grow 8%-13% and 5%-10%, respectively, over fiscal year 2020 (resulting in a net sales range of $1.07-$1.12 billion and an Adjusted EBITDA range of $207-$217 million).
BellRing management expects the following:
BellRing continues to monitor the impact of the COVID-19 pandemic on its business and remains focused on ensuring its ability to safeguard the health of its employees, including their economic health, maintaining the continuity of its supply chain to serve customers and consumers and preserving financial liquidity to mitigate the uncertainty caused by the pandemic.
The convenient nutrition category continues to be negatively impacted by changes in consumer behavior (primarily lower on-the-go consumption) in response to the COVID-19 pandemic. In the fourth quarter of 2020, the liquids and powders sub-categories returned to growth relatively in line with their pre-pandemic growth rates. However, the bar sub-category continues to experience year-over-year declines. International net sales for Dymatize and PowerBar products improved when compared to the third quarter of 2020, but continue to be negatively impacted by changes in consumer behavior as discussed earlier. The trajectory of volume recovery for Dymatize and PowerBar is expected to be impacted by changes in the degree of restrictions on mobility and gathering, including closures of specialty retail stores and gyms.
As of September 30, 2020, BellRing had $48.7 million in cash and cash equivalents and the available borrowing capacity under its revolving credit facility was $170.0 million.
Outlook
For fiscal year 2021, BellRing management expects net sales and Adjusted EBITDA to grow 8%-13% and 5%-10%, respectively, over fiscal year 2020 (resulting in a net sales range of $1.07-$1.12 billion and an Adjusted EBITDA range of $207-$217 million).
BellRing management expects the following:
- Net sales growth to be high single digits in the first half of 2021 and mid teens in the second half of 2021;
- Adjusted EBITDA growth to occur entirely in the second half of 2021, resulting from the timing of material and logistics cost increases, as well as incremental investments in brand building; and
- Quarterly Adjusted EBITDA pacing in the first half of 2021 to be similar to 2020.
BellRing Brands (BRBR) stock price history since its listing
The image below, obtained from Google shows the stock price history of The BellRing Brands (BRBR) since its listing and it's been a pretty good time for BellRing Brands stockholders over the last 5 years. 5 years ago the stock was trading at $16.30 and its currently trading at $21.40. That's a very strong return of 31% provided to BellRing Brands stockholders since their listing.
The stock of BellRing Brands is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of The BellRing Brands stock is very positive at this point in time.
The stock of BellRing Brands is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of The BellRing Brands stock is very positive at this point in time.
Latest stock valuation of BellRing Brands
.So what is BellRing Brands stock worth based on their 4th quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for BellRing Brands at $12.40 a stock.
We therefore believe the stock of The BellRing Brands is overvalued at its current price of $21.40
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $12.40, thus a good entry point into The BellRing Brands would be at $11.20 or below.
We expect the stock of BellRing Brands to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock price is currently significantly overvalued. Therefore rate the stock as a sell.
We therefore believe the stock of The BellRing Brands is overvalued at its current price of $21.40
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $12.40, thus a good entry point into The BellRing Brands would be at $11.20 or below.
We expect the stock of BellRing Brands to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock price is currently significantly overvalued. Therefore rate the stock as a sell.
Next earnings release BellRing Brands (BRBR)
It is expected that BellRing Brands will release their 1st quarter 2021 earnings report in mid February 2021
Related Topics