BRBR

We rate BELLRING BRANDS, INC. (BRBR) as a Reduce with a composite score of 46.1/100 at a current price of $18.34. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in value (91th percentile) and quality (68th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (9th percentile) and investment (35th percentile) tempers our overall conviction. We assign a No Moat rating (36/100), Medium uncertainty, and Poor capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

BELLRING BRANDS, INC. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 46.1/100 places it at rank #2621 in our full 7,333-stock universe. At $4.6B in market capitalization, BELLRING BRANDS, INC. is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 9%, though momentum at the 9th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 34% (-8.9pp vs sector) narrow to operating margins of 15% (+13.9pp vs sector) and net margins of 9.1%, yielding a gross-to-net conversion rate of 27%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $18.34, BELLRING BRANDS, INC. appears undervalued relative to its fundamentals. Our value factor score of 91/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 11.3x (a 49% discount to the sector median of 22.3x), EV/EBITDA of 10.4x (near the sector median), P/S of 1.0x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to BELLRING BRANDS, INC.. The stock presents a balanced risk profile: risk factors are within normal ranges. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

We identify no major risk factors at this time. The company's stability factor sits at the 48th percentile with quality at the 68th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

We identify limited risk mitigants at this time, which contributes to our medium uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate BELLRING BRANDS, INC.'s capital allocation as Poor. Key concerns include low returns on equity (-65.5%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — BELLRING BRANDS, INC. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, BELLRING BRANDS, INC. receives a Reduce rating with a composite score of 46.1/100 (rank #2621 of 7,333). Our quantitative framework assigns a No Moat (36/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 50/100.

Our analysis does not support a constructive view on BELLRING BRANDS, INC. at this time. The combination of limited competitive advantages, medium uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.