Long-established in the Beverages - Alcoholic industry, Molson Coors Beverage Co (TAP, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 0.09%, juxtaposed with a three-month change of -5.49%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Molson Coors Beverage Co.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 6/10
- Growth rank: 3/10
- GF Value rank: 9/10
- Momentum rank: 2/10
Based on the above method, GuruFocus assigned Molson Coors Beverage Co a GF Score of 67 out of 100, which signals poor future outperformance potential.
Understanding Molson Coors Beverage Co Business
Molson Coors Beverage Co, with a market cap of $11.19 billion and sales of $11.95 billion, operates as a major player in the alcoholic beverage industry. The company owns well-known beer brands including Miller, Coors, Blue Moon, and Carling, and ranks as the second-largest beer maker in both value and volume terms in the US, Canada, and the United Kingdom. Through licensing agreements, the firm also brews and distributes beer and hard seltzer under partner brands from Heineken, Anheuser-Busch InBev, Asahi, and Coca-Cola. The brewer uses independent distributors in the US given the three-tier distribution requirements, while using a combination of distributors and an in-house sales team in Canada and Europe. North America remains its largest market, contributing over 80% of total revenue.
Financial Strength Breakdown
Molson Coors Beverage Co's financial strength indicators present some concerning insights about the company's balance sheet health. The company's Altman Z-Score is just 1.54, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.07 indicates a struggle in handling existing debt levels.
Growth Prospects
A lack of significant growth is another area where Molson Coors Beverage Co seems to falter, as evidenced by the company's low Growth rank. Lastly, Molson Coors Beverage Co predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Considering Molson Coors Beverage Co's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. Investors looking for more robust investment opportunities might consider exploring other companies with stronger GF Scores.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
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.
