BRC Inc. (NYSE: BRCC)

Sector: Consumer Defensive Industry: Packaged Foods CIK: 0001891101
Market Cap 55.13 Mn
P/B 1.15
P/E -4.93
P/S 0.14
ROIC (Qtr) -19.37
Div Yield % 0.00
Rev 1y % (Qtr) 2.55
Total Debt (Qtr) 62.93 Mn
Debt/Equity (Qtr) 1.31
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About

Black Rifle Coffee Company (BRCC), a prominent name in the coffee industry, operates through three primary channels: Wholesale, Direct to Consumer (DTC), and Outposts. The company, headquartered in the United States, is known for its commitment to serving high-quality coffee and content to active military, veterans, first responders, and those who hold America in high regard. BRCC's main business activities revolve around the production and sale of a wide range of coffee products, including bagged coffee, ready-to-drink coffee, and single-serve...

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Investment thesis

Bull case

  • Healthy cash reserves of 9.48M provide 2.05x coverage of short-term debt 4.62M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 222.09M provides 3.53x coverage of total debt 62.93M, indicating robust asset backing and low credit risk.
  • Tangible assets of 222.09M provide exceptional 47.57x coverage of deferred revenue 4.67M, showing strong service capability backing.
  • Robust tangible asset base of 222.09M provides 8.15x coverage of working capital 27.25M, indicating strong operational backing.
  • Tangible assets of 222.09M provide robust 5.36x coverage of other current liabilities 41.42M, indicating strong asset backing.

Bear case

  • Operating cash flow of 1.07M barely covers its investment activities of (4.48M), with a coverage ratio of -0.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 9.48M against inventory of 53.02M, the 0.18 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 1.07M provides insufficient coverage of deferred revenue obligations of 4.67M, which is 0.23x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 1.07M shows concerning coverage of stock compensation expenses of 10.43M, with a 0.10 ratio indicating potential earnings quality issues.
  • Free cash flow of (3.41M) provides weak coverage of capital expenditures of 4.48M, with a -0.76 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Packaged Foods
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KHC Kraft Heinz Co 28.20 Bn -4.82 1.13 21.22 Bn
2 GIS General Mills Inc 26.99 Bn 20.72 1.54 13.73 Bn
3 JBS Jbs N.V. 17.81 Bn 10.08 0.23 23.92 Bn
4 MKC Mccormick & Co Inc 16.10 Bn 44.21 3.77 4.00 Bn
5 HRL Hormel Foods Corp /De/ 12.37 Bn 18.03 1.34 2.86 Bn
6 SJM J M SMUCKER Co 11.08 Bn 19.60 1.97 7.91 Bn
7 PPC Pilgrims Pride Corp 10.32 Bn 9.54 0.56 3.29 Bn
8 MICC Magnum Ice Cream Co N.V. 9.71 Bn 28.17 1.04 4.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.69 1.47
EV to Cash from Ops. EV/CFO 144.04 29.75
EV to Debt EV to Debt 2.44 27.85
EV to EBIT EV/EBIT -262.52 86.88
EV to EBITDA EV/EBITDA -20.40 -156.20
EV to Free Cash Flow [EV/FCF] EV/FCF -45.10 -5.67
EV to Market Cap EV to Market Cap 2.79 1.15
EV to Revenue EV/Rev 0.39 7.32
Price to Book Value [P/B] P/B 1.15 8.48
Price to Earnings [P/E] P/E -4.93 14.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 4.58
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.76
Dividend per Basic Share Div per Share (Qtr) 0.00 0.65
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 22.76
Interest Coverage Int. cover (Qtr) -0.06 6.64
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 68.70 -118.07
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 23.93 43.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.66
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -115.57 -48.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -336.66 -152.35
EBIT Growth (1y) % EBIT 1y % (Qtr) -115.89 -50.79
EBT Growth (1y) % EBT 1y % (Qtr) -130.41 -54.94
EPS Growth (1y) % EPS 1y % (Qtr) -100.00 -28.10
FCF Growth (1y) % FCF 1y % (Qtr) -133.35 7.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -6.75 439.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.76 1.01
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.12
Cash Ratio Cash Ratio (Qtr) 0.12 0.86
Current Ratio Curr Ratio (Qtr) 1.34 2.60
Debt to Equity Ratio Debt/Equity (Qtr) 1.31 2.21
Interest Cover Ratio Int Coverage (Qtr) -0.06 6.64
Times Interest Earned Times Interest Earned (Qtr) -0.06 6.64
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.00 -919.13
EBIT Margin % EBIT Margin % (Qtr) -0.15 -1,474.87
EBT Margin % EBT Margin % (Qtr) -2.82 -1,537.76
Gross Margin % Gross Margin % (Qtr) 36.30 26.98
Net Profit Margin % Net Margin % (Qtr) -2.90 -1,538.60