STZConstellation Brands
Is the business good?
A genuinely good business: earnings fully cash-backed (1.3×) and margins widening.
Operating profit is fully backed by cash.
Operating margin has widened over the past few years, the business is getting more profitable per dollar of sales.
Margin-driven, fat margins on slower asset turns. ROE 18% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is STZ?
Constellation Brands earns 12% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 3.1 points above what the capital costs: growth creates value
- Operating margin
- 32%
Operating margin · Beverages - Brewers median 18% · 12 months to Q1 2027
- Cash conversion
- 1.25×
Cash conversion · operating cash flow covers the operating profit after tax
- Gross margin
- 53%
Gross margin
| Year | Operating margin |
|---|---|
| FY2021 | 32% |
| FY2022 | 26% |
| FY2023 | 30% |
| FY2024 | 32% |
| FY2025 | 3.5% |
| FY2026 | 30% |
Details›
- Gross margin12 months to Q1 2027
- 53%
- Operating margin12 months to Q1 2027
- 32%
- Net margin12 months to Q1 2027
- 20%
- Free cash flow margin
- 20%
- Revenue, trailing twelve months
- $9.06B
- Free cash flow, trailing twelve months
- $1.83B
- Net income, trailing twelve months
- $1.82B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 12%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Consumer Defensive
Ranks #68 of 131 by RyuScore