FORT LAUDERDALE, FL – July 2, 2025 – National Beverage Corp. (NASDAQ: FIZZ), a prominent player in the beverage industry, is considered fairly valued at its current stock price of $44.85, as of July 2, 2025. This assessment follows an updated valuation analysis using the Merged Master Model: Intrinsic Value Calculator for Stocks, which suggests a balanced opportunity for investors. The company’s robust financial performance in its fiscal year ended May 3, 2025, underscores its operational efficiency and profitability, with management expressing optimism for continued growth.
Financial Performance and Earnings Highlights
National Beverage Corp. reported record-breaking results for its fourth quarter and fiscal year ended May 3, 2025.
- TTM net sales reached $1.2 billion, a slight increase from $1.19 billion in the prior year. This growth was primarily driven by the strong performance of its Power+ Brands, particularly LaCroix, and an increase in carbonated soft drink sales.
- TTM net income rose to $186.82 million from $176.73 million, with earnings per share (EPS) increasing to $2.00 from $1.89.
- The gross margin improved to 37.0% of sales, and operating income grew by 7.8% to $235 million, reflecting effective cost management and strong consumer demand for its innovative beverage offerings.
For the fourth quarter specifically:
- Net sales rose by 5.5% to $313.63 million.
- Operating income increased by 8.6% to $57.5 million.
- Net income grew to $44.76 million, resulting in an EPS of $0.48.
These results were significantly bolstered by the introduction of new LaCroix flavors—Sunshine, Cherry Lime, and Blackberry Cucumber—which began shipping in the fourth quarter, providing a notable growth stimulus despite a challenging consumer environment.
Valuation Analysis
Using the Merged Master Model, which incorporates both the Buffett Valuation Method and the McGrew Valuation Method, FIZZ’s intrinsic value per share was calculated at $43.06. This figure closely aligns with its current market price of $44.85, indicating the stock is fairly valued with a modest 4.16% premium over its intrinsic value. This positions FIZZ within the “Hold” range (6% below to 35% above intrinsic value). The valuation is based on Free Cash Flow (FCF), as FIZZ is a non-financial services company, and integrates conservative growth assumptions given its classification as a non-growth stock.
The analysis utilized a TTM FCF of $218.46 million, derived from a net income of $186.82 million, adjusted for estimated derivative gains/losses of $16,000 and capital expenditures of $31.65 million. Historical FCF data from 2021 to 2024 showed a 4-year Compound Annual Growth Rate (CAGR) of 0.95%, falling below the 10% threshold for growth stocks, which led to the application of a 3% constant growth rate for projections. The model also applied an 8% discount rate and a 2.5% perpetual growth rate, with shares outstanding at 93.76 million (including 150,000 preferred shares). Net debt was set to $0, as cash and cash equivalents ($149.22 million) exceeded total debt ($55.33 million).
The valuation table is summarized below:
| Stock Ticker | Valuation Method | Intrinsic Value per Share | Price with 25% Margin of Safety | Last Closing Price | Valuation Status |
| FIZZ | Buffett Valuation | $43.06 | $32.30 | $44.85 | Hold |
| FIZZ | McGrew Valuation | $43.06 | $32.30 | $44.85 | Hold |
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Financial Metrics: ROE and ROTA
FIZZ’s TTM Return on Equity (ROE) of 41.05% and Return on Tangible Assets (ROTA) of 42.41% underscore its strong financial health and efficient capital utilization.
- The ROE, calculated as TTM net income ($186.82 million) divided by average shareholders’ equity ($455.08 million), indicates efficient use of shareholder capital to generate profits.
- The ROTA, calculated as TTM net income divided by average tangible assets ($440.47 million), reflects exceptional returns on tangible assets.
These metrics solidify FIZZ’s position as a financially robust company capable of delivering significant value to shareholders.
Management Outlook
Management expressed strong optimism in the earnings release, citing increased volume in October 2024 and improved consumer confidence as positive indicators for the new fiscal year. The company highlighted its innovative approach, particularly with LaCroix’s new flavors and marketing initiatives. These include:
- A multi-city bus tour featuring LaCroix Sunshine’s vibrant graphics.
- Partnerships with professional sports teams (e.g., Florida Panthers, WNBA’s Indiana Fever and Dallas Wings, and soccer teams).
- Creative in-store and social media campaigns like BracDED (in-store taste performances) and MerchCMX (themed displays).
A company spokesperson stated, “We begin our new fiscal year with optimism and confidence that our innovative brands are well-positioned to deliver a ‘healthy’ future to our consumers and shareholders.” While specific numerical forecasts for EPS or revenue were not provided, the emphasis on innovation and resilience suggests confidence in sustained growth.
Investment Implications
FIZZ’s current stock price of $44.85, closely aligned with its intrinsic value of $43.06, indicates it is fairly valued, making it a stable “Hold” for investors. The company’s strong ROE of 41.05% and ROTA of 42.41% demonstrate its ability to generate substantial returns, while its strategic focus on product innovation and marketing positions it well in a competitive market. The absence of net debt further strengthens its financial position, providing flexibility for future investments. However, the modest 4.16% premium suggests limited upside potential at current levels, and investors should monitor market conditions and qualitative factors, such as consumer trends and competitive dynamics, before making investment decisions.
Valuation Calculation Note
Valuations were calculated using the Merged Master Model, which applies the Buffett and McGrew Valuation Methods. FCF was derived as Net Income ($186.82 million) minus Derivative Gains/Losses ($16,000, estimated for Q4 2025) minus Capital Expenditures ($31.65 million, with Q4 estimated). A 3% growth rate was used for 10-year projections due to a 0.95% FCF CAGR, with a 2.5% perpetual growth rate and 8% discount rate. Net debt was set to $0 (cash $149.22 million exceeded debt $55.33 million). Shares outstanding were 93.76 million. Limitations include estimated Q4 2025 derivative gains and CapEx, assumed $0 restricted cash, and a 4-year FCF CAGR due to partial TTM data.
Note: FCF is calculated as (Net Income – Derivative Gains/Losses) – Capital Expenditure to account for derivative impacts, ensuring a comprehensive view of cash available for shareholders.
Conclusion
National Beverage Corp. remains a compelling player in the beverage industry, with strong financial metrics and a promising outlook driven by innovation and strategic marketing. Its fair valuation at $44.85, combined with a robust ROE of 41.05% and ROTA of 42.41%, makes it an attractive option for investors seeking stability. Management’s confidence in future growth, supported by new product launches and high-profile partnerships, suggests FIZZ is well-positioned for continued success, though investors should remain vigilant for updates on consumer demand and market conditions.
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