Ambev SA (ABEV) AI Stock Analysis

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Ambev SA

(NYSE:ABEV)

Rating:75Outperform

Price Target:

$2.50

▲(3.73%Upside)

Ambev SA's overall stock score reflects strong financial performance and a positive earnings outlook, balanced by moderate technical and valuation indicators. The company's robust growth in key areas and commitment to shareholder returns are significant strengths, although regional market challenges and upcoming cost pressures are notable considerations.

Positive Factors

Capital Allocation

The shift to more frequent cash returns by Ambev could enhance visibility on capital allocation and potentially support the shares.

Market Positioning

Higher beer prices present an opportunity for Ambev to strengthen its position in the mainstream category and potentially gain market share.

Valuation

Ambev's stock is considered to be trading at an attractive 7% free cash flow yield, suggesting a potentially good investment opportunity.

Negative Factors

Cost Pressures

Potential increases in costs due to higher aluminum prices and currency depreciation pose a risk to Ambev.

Dividend Expectations

The announced dividends and interest-on-capital payments were below estimates and consensus, which could disappoint investors.

Ambev SA (ABEV) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$38.47B

Dividend Yield3.67%

Average Volume (3M)30.25M

Price to Earnings (P/E)14.7

Beta (1Y)0.20

Revenue Growth1.25%

EPS Growth-13.02%

CountryUS

Employees43,000

SectorConsumer Defensive

Sector Strength61

IndustryBeverages - Alcoholic

Share Statistics

EPS (TTM)0.04

Shares Outstanding15,761,639,000

10 Day Avg. Volume35,423,828

30 Day Avg. Volume30,247,125

Financial Highlights & Ratios

PEG Ratio1.15

Price to Book (P/B)2.76

Price to Sales (P/S)0.00

P/FCF Ratio16.04

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.07

Price Target Upside27.39% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Ambev SA Business Overview & Revenue Model

Company DescriptionAmbev SA (ABEV) is a leading beverage company in Latin America, headquartered in São Paulo, Brazil. It operates primarily in the beer, soft drinks, and non-alcoholic beverages sectors. Ambev is known for producing, distributing, and selling a wide range of products, including popular brands like Skol, Brahma, Antarctica, and international brands such as Budweiser, Stella Artois, and Corona. The company is part of Anheuser-Busch InBev, one of the largest brewing companies globally, and it serves markets across Latin America, including Brazil, Argentina, and several other countries.

How the Company Makes MoneyAmbev SA generates revenue primarily through the production, distribution, and sale of alcoholic and non-alcoholic beverages. The company's primary revenue streams include the sale of its extensive portfolio of beer brands, which account for the majority of its income. In addition to beer, Ambev also earns from selling soft drinks, energy drinks, and bottled water. The company benefits from its large distribution network and established market presence, allowing it to reach a broad customer base across Latin America. Strategic partnerships and brand licensing agreements, particularly with global brands such as Budweiser and Corona, further enhance its revenue potential. Additionally, Ambev's integration within Anheuser-Busch InBev provides synergies in procurement, distribution, and marketing, contributing to its profitability.

Ambev SA Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: -2.82%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

Ambev's earnings call highlighted strong financial performance with growth in revenue, EBITDA, and cash flow. The company is expanding its digital sales and premium segments while also announcing significant dividends. However, challenges remain with specific brand performances, market pressures, and regional declines. Despite these challenges, the overall outlook remains positive with a focus on margin expansion.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

Ambev reported high-single digit revenue growth, a 0.7% increase in volume, a 6% increase in net revenue per hectoliter, and a 150 basis points expansion in gross margin.

EBITDA and Cash Flow Growth

EBITDA grew by double digits with a 180 basis points margin expansion, and a cash flow from operating activities increased by 68% year-on-year, reaching BRL1.2 billion.

Digital Sales Expansion

The GMV of digital sales grew by 60%, with monthly active buyers rising by high-single digits and SKU per POC ratio improving by low-single digits.

Premium and Non-Alcoholic Segment Growth

Premium and super-premium brands grew in the 20s, while non-alcoholic beer volumes expanded by approximately 40%.

Dividend Announcement

Ambev announced an intermediary dividend of BRL2 billion to be paid in July, reinforcing its commitment to returning cash to shareholders.

Negative Updates

Skol Brand Challenges

Skol was a primary driver of the core volume decline, although the company is working on reversing this trend.

FX and Commodities Pressure

Ambev expects significant FX and commodities pressure starting in Q2, posing a challenge to margin expansion.

Market Challenges in Argentina

The beer industry in Argentina declined by low-single digits, with Ambev's market share remaining flat. The market is still recovering from previous economic challenges.

Volume Decline in Dominican Republic

In the Dominican Republic, volumes declined by mid-single digits due to a softer macroeconomic environment.

Company Guidance

In the first quarter of 2025, Ambev reported a high-single-digit increase in top-line performance, underpinned by a 0.7% rise in volume and a roughly 6% increase in net revenue per hectoliter, leading to a 150 basis point expansion in gross margin. EBITDA grew by double digits with a 180 basis point margin expansion, while net income remained stable despite a challenging comparison due to a tax one-off last year. The company emphasized robust execution across its strategic pillars, including a high-single-digit increase in volumes in key markets, significant volume growth in non-alcoholic beer by mid-thirties, and a 60% increase in gross merchandise value (GMV) in its marketplace. Ambev also highlighted a 5% rise in orders through Zé Delivery, which achieved nearly 17 million orders, and a BRL1.2 billion cash flow from operating activities, marking a 68% increase year-on-year. Looking ahead, the company anticipates facing significant FX and commodities pressures starting in Q2, though it remains committed to expanding consolidated margins.

Ambev SA Financial Statement Overview

Summary

Ambev SA exhibits strong financial health with consistent revenue and profit growth, robust profitability margins, and a solid capital structure. The low leverage and strong equity position provide financial stability, while efficient cash flow management supports operational flexibility.

Income Statement

Very Positive

Ambev SA shows strong financial performance with consistent revenue growth and high profitability margins. The Gross Profit Margin stands at 51.5% for TTM, indicating efficient cost management. The Net Profit Margin is robust at 15.7%, reflecting healthy bottom-line performance. Revenue has grown by 2.5% from 2024 to TTM, demonstrating steady market expansion. EBIT and EBITDA margins are strong at 24.7% and 29.5% respectively, highlighting operational efficiency.

Balance Sheet

Positive

The company maintains a solid balance sheet with a low Debt-to-Equity Ratio of 0.03, indicating low financial leverage and strong equity position. Return on Equity is healthy at 15.3%, showcasing effective use of shareholder capital. The Equity Ratio is 64.2%, reflecting a strong capital structure with a large proportion of assets financed by equity.

Cash Flow

Positive

Ambev SA demonstrates solid cash flow management with a 3.2% Free Cash Flow Growth Rate, ensuring liquidity and operational flexibility. The Operating Cash Flow to Net Income Ratio is 1.84, indicating strong cash conversion from earnings. Free Cash Flow to Net Income Ratio is at 1.53, signifying efficient cash flow generation relative to net profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	91.67B	89.45B	79.74B	79.71B	72.85B	58.38B
Gross Profit	47.17B	45.84B	40.45B	39.29B	37.19B	31.31B
EBITDA	27.06B	26.72B	23.46B	23.08B	22.87B	20.77B
Net Income	14.43B	14.44B	14.50B	14.46B	12.67B	11.38B
Balance Sheet
Total Assets	147.30B	162.51B	132.64B	137.96B	138.60B	125.20B
Cash, Cash Equivalents and Short-Term Investments	20.31B	29.84B	16.34B	15.38B	18.54B	18.79B
Total Debt	3.22B	3.45B	3.50B	3.85B	3.10B	4.79B
Total Liabilities	51.82B	62.93B	52.50B	54.63B	54.58B	50.05B
Stockholders Equity	94.53B	98.64B	78.97B	81.96B	82.64B	73.82B
Cash Flow
Free Cash Flow	22.02B	21.35B	18.71B	14.11B	15.22B	14.16B
Operating Cash Flow	26.58B	26.10B	24.71B	20.64B	22.90B	18.86B
Investing Cash Flow	-4.47B	-5.46B	-5.77B	-5.00B	-7.73B	-6.80B
Financing Cash Flow	-16.88B	-10.35B	-16.12B	-16.34B	-16.04B	-8.60B

Ambev SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.41

Price Trends

50DMA

2.46

Negative

100DMA

2.32

Positive

200DMA

2.17

Positive

Market Momentum

MACD

>-0.01

Negative

RSI

47.90

Neutral

STOCH

58.73

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABEV, the sentiment is Negative. The current price of 2.41 is below the 20-day moving average (MA) of 2.42, below the 50-day MA of 2.46, and above the 200-day MA of 2.17, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 47.90 is Neutral, neither overbought nor oversold. The STOCH value of 58.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ABEV.

Ambev SA Risk Analysis

Ambev SA disclosed 49 risk factors in its most recent earnings report. Ambev SA reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ambev SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BUD	79 Outperform	$136.73B	23.50	7.31%	1.53%	0.58%	9.94%
CCU	77 Outperform	$2.47B	14.06	11.33%	3.26%	6.18%	61.39%
ABEV	75 Outperform	$38.47B	14.72	15.09%	3.67%	1.25%	-13.02%
FMX	73 Outperform	$21.77B	21.99	9.84%	1.73%	-0.37%	44.52%
Sector *	65 Neutral	$27.34B	15.12	-4.22%	3.16%	1.01%	1.94%
STZ	65 Neutral	$30.03B	49.10	-5.05%	2.40%	-0.47%	-117.62%
TAP	65 Neutral	$9.95B	9.85	7.90%	3.84%	-5.17%	-0.74%

* Consumer Defensive Sector Average

Performance Comparison

ABEV

Ambev SA

2.41

0.43

21.72%

BUD

Anheuser-Busch Inbev Sa

67.56

7.98

13.39%

CCU

Compania Cervecerias Unidas SA

13.30

1.46

12.33%

STZ

Constellation Brands

170.55

-77.55

-31.26%

FMX

Fomento Economico Mexicano

104.48

-5.49

-4.99%

TAP

Molson Coors

49.38

0.54

1.11%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 08, 2025