BRC (BRCC) AI Stock Analysis

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BRC

(NYSE:BRCC)

57Neutral

BRC's operational improvements and strategic market actions positively influence the score, but persistent challenges in profitability, bearish technical indicators, and valuation concerns weigh it down. The company's efforts to improve governance are a positive step, yet financial stability and growth in revenue remain key areas of concern.

Positive Factors

Earnings

Fourth-quarter EBITDA of $10 million were above our estimate of $7 million.

Operational Efficiency

The operating expense ratio was better than the forecast.

Negative Factors

EBITDA Guidance

Management provided initial 2025 EBITDA guidance below our forecast.

Wholesale Sales

Headline wholesale sales fell 9%.

BRC (BRCC) vs. S&P 500 (SPY)

Market Cap

$490.24M

Dividend YieldN/A

Average Volume (3M)587.12K

Price to Earnings (P/E)―

Beta (1Y)1.37

Revenue Growth-1.04%

EPS Growth86.17%

CountryUS

Employees551

SectorReal Estate

Sector Strength77

IndustryPackaged Foods

Share Statistics

EPS (TTM)-0.04

Shares Outstanding78,609,690

10 Day Avg. Volume502,880

30 Day Avg. Volume587,115

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.19

Price to Cash Flow (P/CF)53.90

P/FCF Ratio231.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.17

Price Target Upside37.83% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

BRC Business Overview & Revenue Model

Company DescriptionBRC Inc., through its subsidiaries, purchases, roasts, and sells coffee, coffee accessories, and branded apparel. The company also produces media content; podcasts; and digital and print journals, as well as sells coffee brewing equipment, and outdoor and lifestyle gear. It supports active military, veterans, and first responders. The company offers its products through convenience, grocery, drug, and mass merchandise stores; outdoor, do it yourself, and lifestyle retailers; and company operated and franchised Black Rifle Coffee retail coffee shop locations, as well as through e-commerce. BRC Inc. was founded in 2014 and is based in Salt Lake City, Utah.

How the Company Makes MoneyBRCC generates revenue primarily through the direct sale of coffee products and merchandise via its online platform and retail partnerships. The company capitalizes on its strong brand identity by offering subscription services, where customers can receive regular shipments of their favorite coffee blends. Additionally, BRCC has expanded its retail presence by opening physical coffee shops in select locations. The company's earnings are further bolstered by its community engagement initiatives and collaborations with veteran-focused charities, which enhance its brand loyalty and customer base.

BRC Financial Statement Overview

Summary

BRC's financial performance shows operational improvement with better margins and cash flow management. However, profitability challenges persist, with negative net profit margins and high leverage on the balance sheet.

Income Statement

Neutral

The company has shown a significant improvement in gross profit margin over the years, with a 41.17% margin in 2024 compared to 30.76% in 2020. However, net profit margins remain negative, indicating ongoing challenges in achieving profitability. Revenue growth has been volatile, showing a decline of 1.05% from 2023 to 2024. EBIT and EBITDA margins have improved significantly in 2024 compared to previous years, but still reflect operational challenges.

Balance Sheet

Neutral

The balance sheet shows a high debt-to-equity ratio, with total debt surpassing stockholders' equity, presenting potential financial risk. The equity ratio is low due to small equity compared to total assets. Return on equity is negative, reflecting ongoing losses. The company's financial stability is a concern, with high leverage impacting financial flexibility.

Cash Flow

Positive

Cash flow metrics show improvement, with positive operating cash flow and free cash flow in 2024. The free cash flow to net income ratio reflects operational cash generation despite net losses. The free cash flow growth rate is positive, indicating better cash management compared to previous years. However, the operating cash flow to net income ratio suggests room for efficiency improvements.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
391.49M	395.62M	301.31M	233.10M	163.91M
	Gross Profit
161.17M	125.45M	99.18M	89.69M	69.41M
	EBIT
3.85M	-50.21M	-67.76M	-11.58M	5.78M
	EBITDA
3.85M	-42.94M	-64.11M	-9.48M	7.02M
	Net Income Common Stockholders
-2.95M	-16.75M	-82.91M	-13.85M	4.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.81M	12.45M	38.99M	18.33M	35.23M
	Total Assets
227.38M	235.78M	225.33M	87.08M	72.54M
	Total Debt
33.67M	109.24M	70.30M	35.00M	14.23M
	Net Debt
26.86M	96.79M	31.31M	16.67M	-21.00M
	Total Liabilities
177.89M	189.27M	129.40M	236.57M	175.42M
	Stockholders Equity
13.17M	13.27M	25.80M	-149.49M	-102.88M
Cash Flow		Free Cash Flow
2.64M	-52.19M	-146.59M	-26.98M	1.79M
	Operating Cash Flow
11.31M	-24.97M	-116.19M	-7.69M	11.55M
	Investing Cash Flow
-7.71M	-21.51M	-30.40M	-19.29M	-9.76M
	Financing Cash Flow
-10.70M	21.40M	167.25M	9.68M	28.81M

BRC Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price2.30

Price Trends

50DMA

2.22

Positive

100DMA

2.58

Negative

200DMA

3.24

Negative

Market Momentum

MACD

0.01

Negative

RSI

60.02

Neutral

STOCH

89.66

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRCC, the sentiment is Neutral. The current price of 2.3 is above the 20-day moving average (MA) of 2.11, above the 50-day MA of 2.22, and below the 200-day MA of 3.24, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 60.02 is Neutral, neither overbought nor oversold. The STOCH value of 89.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BRCC.

BRC Risk Analysis

BRC disclosed 58 risk factors in its most recent earnings report. BRC reported the most risks in the “Finance & Corporate” category.

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

Latest Risks Added 0 New Risks

BRC Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LWAY	73 Outperform	$352.72M	39.16	13.64%	―	16.67%	-20.96%
NATR	64 Neutral	$211.82M	28.37	4.98%	―	2.03%	-47.76%
Sector *	59 Neutral	$2.72B	11.59	0.11%	8770.69%	5.44%	-16.52%
STKL	58 Neutral	$506.49M	―	-6.77%	―	-5.50%	89.98%
BRCC	57 Neutral	$490.24M	―	-22.32%	―	-1.04%	86.17%
BGS	51 Neutral	$534.97M	―	-36.94%	11.24%	-6.30%	-258.92%
WEST	50 Neutral	$538.04M	―	-21.15%	―	-1.62%	-81.45%

* Real Estate Sector Average

Performance Comparison

BRCC

BRC

2.30

-1.74

-43.07%

BGS

B&G Foods

6.76

-3.40

-33.46%

LWAY

Lifeway Foods

23.20

3.19

15.94%

NATR

Nature's Sunshine Products

11.46

-8.33

-42.09%

STKL

SunOpta

4.32

-2.33

-35.04%

WEST

Westrock Coffee

5.71

-4.54

-44.29%

BRC Earnings Call Summary

Earnings Call Date: Mar 3, 2025 | % Change Since: -10.51% | Next Earnings Date: May 5, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mixed sentiment with significant achievements in operational efficiency, product launch, and market share gains countered by challenges in revenue growth and direct-to-consumer performance. The growth in Adjusted EBITDA and market expansion highlights strong financial health, but the overall revenue decline and cost pressures from green coffee inflation present notable concerns.

Highlights

Significant Growth in Adjusted EBITDA

Adjusted EBITDA tripled in 2024, demonstrating strong financial performance and operational efficiency improvements.

Gross Margin Improvement

Gross margin improved by 950 basis points to 41.2% in 2024, driven by supply chain productivity and reduced transformation costs.

Distribution Growth and Market Share Gains

Black Rifle Coffee's distribution in packaged coffee at grocery increased by 28 points to 45% ACV over the year, with total distribution reaching 49% by Q4.

Energy Drink Launch

Black Rifle Energy launched with a reach of 17% ACV within the first month, with plans for significant growth in 2025 supported by a partnership with Keurig Dr Pepper.

Ready-to-Drink Coffee Market Position

Black Rifle Coffee became the #3 brand in the Ready-to-Drink coffee category, growing sales by 0.5% despite an overall category decline.

Lowlights

Revenue Decline

Overall revenue declined by 1% in 2024 compared to 2023, with specific declines in Outpost and direct-to-consumer segments.

Direct-to-Consumer Segment Challenges

The direct-to-consumer segment saw a 14% revenue decline in 2024, impacted by shifting consumer preferences and reduced marketing focus.

Green Coffee Inflation Impact

Green coffee input costs are expected to be 35% higher in 2025, impacting gross margin by 2.5 percentage points.

Fourth Quarter Revenue Decline

Fourth quarter revenue declined by 12% year-over-year, primarily due to RTD inventory depletion and softness in the coffee and RTD categories.

Company Guidance

During the Black Rifle Coffee Company's Fourth Quarter and Fiscal Year 2024 Earnings Call, the company provided guidance for 2025, highlighting a focus on brand awareness, distribution expansion, and efficient capital deployment. For 2024, Black Rifle reported significant improvements, with adjusted EBITDA tripling and gross margin improving by 9.5 percentage points. Distribution growth was notable, with ACV in packaged coffee at grocery increasing by 28 points to 45%. Looking ahead, the company expects 2025 revenue to range between $395 million and $425 million, with gross margins between 37% to 39%, partially impacted by a 2.5 percentage point headwind from green coffee inflation. They also anticipate adjusted EBITDA between $20 million and $30 million. The Energy launch, expected to significantly contribute to growth, already achieved a 17% ACV and aims for a 20% to 30% ACV by year-end. The company’s wholesale segment is anticipated to drive growth, with a focus on expanding shelf presence and improving operational efficiencies.

BRC Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

BRC Expands Board with New Director Appointments

Positive

Apr 15, 2025

On April 11, 2025, BRC Inc. expanded its Board of Directors from seven to nine members, appointing Stephen Kadenacy and Sean Moriarty as Class II directors until the 2027 annual meeting. Kadenacy, the current CFO, will continue in his role until a successor is appointed. Moriarty, as a non-employee director, opted to receive his $50,000 annual compensation in restricted stock units, with additional RSUs granted under the company’s incentive plan. This strategic board expansion reflects BRC’s commitment to strengthening its governance structure.

Spark’s Take on BRCC Stock

According to Spark, TipRanks’ AI Analyst, BRCC is a Neutral.

BRC’s overall stock score reflects operational improvements and successful market strategies, as evidenced by the earnings call. However, persistent profitability challenges, bearish technical indicators, and valuation concerns weigh down the score.

To see Spark’s full report on BRCC stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.