Constellation Brands, Inc. (STZ) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B below the industry

Constellation Brands's price-to-book of 2.84 is below the Beverages median of 2.94.

Trading below fair value

The share price of $144.12 is below our fair value estimate of $202.15.

Margin of safety over 20%

The price is 28.7% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -1.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth accelerating

Net income grew 57.4% over the last twelve months, against a 5-year average of -3.3% a year.

Growing slower than the industry

Revenue grew -4.3% over the last twelve months; the Beverages median is 4.5%.

Guidance lowered

Constellation Brands lowered its Fiscal 2027 reported Enterprise operating margin outlook on Oct 6, 2026.

Gross margin improving

Gross margin was 52.7% over the last twelve months, against 51.7% a year earlier.

Return on equity under 15%

Return on equity was 23.9% over the last twelve months and averaged 7.9% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 12.3%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Constellation Brands's return on equity of 23.9% is above the Beverages median of 16.5%.

Earnings shrank over 5 years

Net income shrank 3.3% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 20.9% over the last twelve months, against a 5-year average of 6.8%.

Net margin above the industry

Constellation Brands's net margin of 20.9% is above the Beverages median of 7.3%.

High debt

Debt is 120% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 76.8% five years ago to 120%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 25.8% of total debt.

Interest well covered

Operating income covers interest expense 8.1 times.

Short-term assets don't cover short-term debts

Current assets are 1.00 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.86; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Constellation Brands paid dividends worth 2.1% of the share price over the last twelve months.

Yield below Treasuries

The 2.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Constellation Brands yields 2.1%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 36.8% of net income.

Covered by free cash flow

Dividends take 38.5% of free cash flow.