Constellation Brands, Inc. Fundamental Analysis
Constellation Brands, Inc. (STZ) shows strong financial fundamentals with a PE ratio of 12.61, profit margin of 20.14%, and ROE of 23.13%. The company generates $9.0B in annual revenue with weak year-over-year growth of 2.47%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 64.3/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze STZ's fundamental strength across five key dimensions:
Efficiency Score
WeakSTZ struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSTZ trades at attractive valuation levels.
Growth Score
WeakSTZ faces weak or negative growth trends.
Financial Health Score
WeakSTZ carries high financial risk with limited liquidity.
Profitability Score
ExcellentSTZ achieves industry-leading margins.
Key Financial Metrics
Is STZ Expensive or Cheap?
P/E Ratio
STZ trades at 12.61 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, STZ's PEG of 0.02 indicates potential undervaluation.
Price to Book
The market values Constellation Brands, Inc. at 2.76 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 3.82 times EBITDA. This is generally considered low.
How Well Does STZ Make Money?
Net Profit Margin
For every $100 in sales, Constellation Brands, Inc. keeps $20.14 as profit after all expenses.
Operating Margin
Core operations generate 32.14 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $23.13 in profit for every $100 of shareholder equity.
ROA
Constellation Brands, Inc. generates $8.25 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Constellation Brands, Inc. generates strong operating cash flow of $2.67B, reflecting robust business health.
Free Cash Flow
Constellation Brands, Inc. generates strong free cash flow of $1.82B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $10.65 in free cash annually.
FCF Yield
STZ converts 8.12% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.61
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.02
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.76
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.50
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.28
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.91
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.23
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.15
vs 25 benchmark
How STZ Stacks Against Its Sector Peers
| Metric | STZ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.61 | 20.05 | Better (Cheaper) |
| ROE | 23.13% | 750.00% | Weak |
| Net Margin | 20.14% | -3756.00% (disorted) | Strong |
| Debt/Equity | 1.28 | 0.76 | Weak (High Leverage) |
| Current Ratio | 0.91 | 2.29 | Weak Liquidity |
| ROA | 8.25% | 349.00% | Weak |
STZ outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Constellation Brands, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
27.63%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
-619.61%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
28.90%
Industry Style: Defensive, Dividend, Low Volatility
High Growth