This Snack Company's Recent Performance Doesn't Look Tasty

: UTZ | Utz Brands, Inc. News, Ratings, and Charts

UTZ – Shares of Utz Brands (UTZ) have dipped significantly in price as inflation continues to weigh on its growth. While the company witnessed stable revenue growth in the last reported quarter, its negative profit margins and relatively high valuation are concerning. Read on….

Utz Brands, Inc. (UTZ) offers a diversified array of savory snacks under popular brands such as Utz, ON THE BORDER Chips & Dips, Golden Flake, Zapp’s, Good Health, Boulder Canyon, Hawaiian Brand, and TORTIYAHS!.

The company’s shares have declined 36.9% over the past year and 12% year-to-date to close yesterday’s trading session at $14.03. While the company reported positive revenue growth in its last earnings release, there is no way around the inflationary pressures. Its gross margin fell to 33.9% from 38.8%. EBITDA margins were also impacted, falling to 10.7% from 14.1% in the prior-year period.

In addition, in April, Credit Suisse downgraded UTZ from outperform to neutral, citing concerns about the company’s pricing power. The revised rating takes inflation into account.

Here’s what could shape UTZ’s performance in the near term:

Inadequate Financials

UTZ’s revenue increased 26.6% year-over-year to $340.77 million for the first quarter ended April 03, 2022. However, its loss from operations came in at $22.49 million, compared to income from operations of $9.29 million in the prior-year quarter. The company reported a net loss of $17.57 million, while its loss per share amounted to $0.22. In addition, its cash and cash equivalents came in at $14.89, representing a year-over-year decline of 64.4%.

Negative Profit Margins

UTZ’s trailing-12-month gross profit margin of 31.3% is 6.1% lower than the industry average of 33.4%. Also, its trailing-12-month ROA, ROE, and net income margin are 80.2%, 69.6%, and 59.1% lower than their respective industry averages. Moreover, its trailing-12-month asset turnover ratio of 0.47% is 41.9% lower compared to its industry average of 0.82%.

Premium Valuation

In terms of forward non-GAAP P/E, the stock is currently trading at 27.90x, 54.7% higher than the industry average of 18.04x. Also, its forward EV/Sales of 2.11x is 12.1% higher than the industry average of 1.88x. Moreover, UTZ’s forward Price/Cash Flow of 25.36x is 95.9% higher than the industry average of 12.94x.

POWR Ratings Reflect Bleak Outlook

UTZ has an overall D rating, which equates to a Sell in our proprietary POWR Ratings system. The POWR ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. UTZ has a D for Growth and Quality. The company’s poor profitability and lackluster financials are consistent with the Growth and Quality grade.

Of the 88 stocks in the B-rated Food Makers industry, UTZ is ranked #80.

Beyond what I’ve stated above, you can view UTZ ratings for Value, Stability, Momentum, and Sentiment here.

Bottom Line

Despite witnessing stable revenue growth in the last reported quarter, UTZ’s operating loss and lack of profitability are concerning. In addition, the company does not expect to generate much growth in earnings due to the persistent inflationary environment in 2022. Analysts expect its EPS to decline 7.4% in the current year and 11.1% next quarter. So, given its stretched valuation, we think the stock is best avoided now.

How Does Utz Brands Inc. (UTZ) Stack Up Against its Peers?

While UTZ has an overall D rating, one might want to consider its industry peers, Industrias Bachoco S.A.B de C.V. (IBA), Grupo Bimbo S.A.B de C.V. (GRBMF), and JBS S.A. (JBSAY), which have an overall A (Strong Buy).


UTZ shares were trading at $13.85 per share on Tuesday afternoon, down $0.18 (-1.28%). Year-to-date, UTZ has declined -12.47%, versus a -18.47% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
UTZGet RatingGet RatingGet Rating
IBAGet RatingGet RatingGet Rating
GRBMFGet RatingGet RatingGet Rating
JBSAYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

5 Reasons To Still Be Bearish

The recent rally in stocks (SPY) has been impressive. But it is still officially a bear market and there are 5 reasons that bears will not be waving a white flag soon. Lets review why stocks rallied...why they are likely to stall at this level...and the 5 reasons why the bearish argument will likely win the day. Read all that and more in the commentary below.

:  |  News, Ratings, and Charts

3 Dividend Stocks That Could Pay You for Life

Although inflation seems to be cooling down, it is far from the Fed’s target level. And the central bank is expected to continue its interest rate hikes, further slowing down the economy. In these uncertain times, dividend stocks Coca-Cola (KO), Kimberly-Clark (KMB), and Caterpillar (CAT) might be ideal investments to generate a stable stream of income. Read on…

:  |  News, Ratings, and Charts

Bulls in Charge…for Now at Least

Every since the S&P 500 (SPY) made new lows in mid June the bulls have been back in charge. At first it looked like your typical bear market rally. However, there are more and more signals going off that this may be the real deal. As in the new bull market may have arrived. That topic is a big deal as one's outlook, bullish or bearish, weighs heavily on how they construct their portfolio for the days and weeks ahead. That is why we will focus on that topic in today's commentary. Read on below for more…

:  |  News, Ratings, and Charts

Is Costco Stock Worth Its Hefty Price Tag?

Costco Wholesale (COST) is currently trading just 10.9% below its 52-week high and possesses further upside potential, according to Wall Street. The stock closed the last trading session at $545.75. However, is it worth investing in COST at this hefty price level? Let’s find out…

:  |  News, Ratings, and Charts

Bulls in Charge…for Now at Least

Every since the S&P 500 (SPY) made new lows in mid June the bulls have been back in charge. At first it looked like your typical bear market rally. However, there are more and more signals going off that this may be the real deal. As in the new bull market may have arrived. That topic is a big deal as one's outlook, bullish or bearish, weighs heavily on how they construct their portfolio for the days and weeks ahead. That is why we will focus on that topic in today's commentary. Read on below for more…

Read More Stories

More Utz Brands, Inc. (UTZ) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All UTZ News