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Sovos Brands, Inc.NasdaqGS:SOVO Stock Report

Market Cap US$2.3b
Share Price
n/a
US$23
n/aintrinsic discount
1Y63.4%
7D1.0%
1D
Portfolio Value
​
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Sovos Brands, Inc.

NasdaqGS:SOVO Stock Report

Market Cap: US$2.3b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

Sovos Brands (SOVO) Stock Overview

Sovos Brands, Inc., through its subsidiaries, operates as a consumer-packaged food company that manufactures, distributes, and sells consumer food products in the United States. More details

SOVO fundamental analysis
Snowflake Score
Valuation2/6
Future Growth4/6
Past Performance2/6
Financial Health2/6
Dividends0/6

Rewards

Trading at 39.1% below our estimate of its fair value

Earnings are forecast to grow 57.44% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Significant insider selling over the past 3 months

Large one-off items impacting financial results


SOVO Community Fair Values

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Sovos Brands, Inc. Competitors

Price History & Performance

Summary of share price highs, lows and changes for Sovos Brands
Historical stock prices
Current Share PriceUS$22.98
52 Week HighUS$23.00
52 Week LowUS$13.48
Beta0.014
1 Month Change3.23%
3 Month Change4.74%
1 Year Change63.44%
3 Year Changen/a
5 Year Changen/a
Change since IPO69.97%

Recent News & Updates

Recent updates

Analysis Article • Sep 01

What Sovos Brands, Inc.'s (NASDAQ:SOVO) 27% Share Price Gain Is Not Telling You

Sovos Brands, Inc. ( NASDAQ:SOVO ) shareholders would be excited to see that the share price has had a great month...
Analysis Article • Jun 26

Sovos Brands, Inc. (NASDAQ:SOVO) Shares Could Be 36% Below Their Intrinsic Value Estimate

Key Insights The projected fair value for Sovos Brands is US$30.35 based on 2 Stage Free Cash Flow to Equity Sovos...
Analysis Article • May 08

Returns At Sovos Brands (NASDAQ:SOVO) Are On The Way Up

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Typically, we'll want...
Analysis Article • Feb 08

Calculating The Fair Value Of Sovos Brands, Inc. (NASDAQ:SOVO)

How far off is Sovos Brands, Inc. ( NASDAQ:SOVO ) from its intrinsic value? Using the most recent financial data, we'll...
Analysis Article • Oct 25

Sovos Brands, Inc.'s (NASDAQ:SOVO) Intrinsic Value Is Potentially 77% Above Its Share Price

How far off is Sovos Brands, Inc. ( NASDAQ:SOVO ) from its intrinsic value? Using the most recent financial data, we'll...
Seeking Alpha • Oct 04

Sovos Brands: Strong Growth Continues

Summary Sovos Brands continues to generate strong revenue growth, but some of its bottom line results have been mixed. All things considered, the company has held up well in the current volatile market. Shares are not value prospects, but they can offer a nice upside for growth-oriented investors moving forward. The past several months have been particularly hard for investors in the stock market. The market, broadly speaking, has tanked amidst fears related to inflation, rising interest rates, supply chain concerns, and the prospect of a real economic downturn. Very few companies have performed well in this environment. But one company that has held up better than most is Sovos Brands (SOVO). This enterprise owns a portfolio of food brands such as Rao's, Birch Benders, and Michael Angelo's. Even though some of its financial performance has been somewhat mixed, the overall trajectory for the company looks positive. And with how far shares have fallen, upside potential from here likely is positive. Due to these factors, I have decided to keep my 'buy' rating on the company, with the understanding that market conditions should cause investors to be diligent in assessing changes to the underlying business as more data comes out. Growth continues Back in December of 2021, I wrote my first article discussing whether or not Sovos Brands made sense for investors to consider buying into. In that article, I acknowledged that the company had done well to expand at a rapid pace over the prior few years. Its overall financial picture had been getting better year after year, though it was also true that there was still plenty of room left for improvements to be made. The only thing that turned me off about the company was that its stock looked rather pricey. But given how rapidly the company was growing, I felt the firm could grow into its valuation. This led me to rate the company a 'buy', reflecting my belief that it would generate returns that would outperform the broader market for the foreseeable future. So far, that company has delivered. While the business has generated a loss for investors of 14.5%, that loss is considerably smaller than the 24% hit that investors would have received owning the S&P 500. Author - SEC EDGAR Data Despite the pricey shares, the company was aided by strength on both its top and bottom lines. For instance, during the 2020 fiscal year, revenue came in at $560.1 million. In 2021, sales shot up to $719.2 million. This 28.4% increase was driven largely by a 34% rise associated with sales of the Rao's brand. Although companies have been raising prices and such price increases could cause sales to rise in a way that looks rather deceptive, management asserted that the majority of the increase under this brand was because of higher sauce and frozen shipments to key customers. The company ended its 2021 fiscal year with household penetration for its sauce business of 10.9%. That was up 2.6% compared to the 2020 fiscal year. And exiting the final quarter of 2021, Rao's had become the number two pasta and pizza sauce brand as measured by dollar consumption in the markets in which the company operates. The firm also benefited from increased revenue associated with its spoonable yogurt and it also saw a $47.3 million increase in sales associated with the purchase of the Birch Benders brand that was acquired in October of 2020. Bottom line results for the company have been slightly mixed. For instance, net income fell from $10.8 million to $1.9 million. But if we make certain adjustments, then profits would have risen from $44.1 million to $54.3 million. Operating cash flow for the company also fell, dropping from $62.9 million to $46.9 million. But if we adjust for changes in working capital, it would have risen from $54 million to $77.3 million. Over that same window of time, we also saw EBITDA for the company expand, climbing from $91.1 million to $115.1 million. Author - SEC EDGAR Data As was the case with the 2021 fiscal year, the 2022 fiscal year seems to be somewhat mixed but generally favorable. Revenue in the first half of the 2022 fiscal year totaled $407.4 million. That's 16% higher than the $351.2 million generated the same time one year earlier. This increase in revenue was driven primarily by higher volumes and, to a lesser extent, by product pricing and improved product mix. Once again, the Rao's brand was a key driver of growth, with revenue surging by 29.6% year-over-year thanks to higher sauce sales. Other brands also improved for the most part. From a profitability perspective, the picture is more complicated. Net income fell from $10.4 million in the first half of the 2021 fiscal year to negative $26.2 million the same time this year. This was driven in part by the company's gross profit margin declining from 31.7% to 26.7% as a result of higher raw material, packaging, labor, logistics, and energy costs. The company was also somewhat affected by higher slotting fees aimed at supporting its launch of noosa frozen Gelato. Although this change in gross profit margin may not seem material, such a change spread across the revenue the company generated in the first half of the 2022 fiscal year would have impacted bottom line results by $20.4 million. Other profitability metrics have been rather volatile as well. For instance, operating cash flow rose from $12.6 million to $16.3 million. But if we adjust for changes in working capital, it would have risen more modestly from $46.4 million to $48.1 million. Meanwhile, EBITDA for the company worsened, dropping from $62.9 million to $53.3 million. When it comes to the 2022 fiscal year as a whole, management now anticipates revenue coming in near the low end of its guidance. That range was between $825 million and $835 million. Also near the low end of the guidance should be EBITDA, with that range being between $116 million and $122 million. For the purpose of my analysis, I decided just to use the very bottom of that range. No guidance was given when it came to other profitability metrics. However, if we assume that adjusted operating cash flow will increase this year at the same rate that EBITDA should, then we should anticipate a reading of $77.9 million. It's also worth noting that valuing the company is complicated by the fact that management just issued 9.775 million additional shares in exchange for gross proceeds of $136.85 million. In my analysis, I factored in these changes.
Seeking Alpha • Aug 11

Sovos Brands 8.5M share secondary priced at $14.00

Sovos Brands (NASDAQ:SOVO) has priced an underwritten secondary public offering by certain stockholders of Sovos Brands of 8.5M shares of Sovos Brands’ common stock, par value $0.001/share at a price of $14.00/share. Offering is expected to close on August 15, 2022. The offering consists entirely of secondary shares to be sold by the Selling Stockholders. The selling stockholders will receive all of the proceeds from the offering. Underwriters are granted a 30-day option to purchase up to an additional 1,275,000 shares of common stock at the public offering price. Earlier, Sovos Brands falls aftermarket on secondary stock offering.
Seeking Alpha • Aug 03

Sovos Brands Non-GAAP EPS of $0.13 beats by $0.04, revenue of $197.4M beats by $16.44M

Sovos Brands press release (NASDAQ:SOVO): Q2 Non-GAAP EPS of $0.13 beats by $0.04. Revenue of $197.4M (+22.0% Y/Y) beats by $16.44M. Raising full year net sales range to $825-$835 million (vs. $813.54M consensus) and maintaining adjusted EBITDA range, with guidance at the lower end.
Seeking Alpha • May 06

Sovos Brands - Premium Packaged Foods To Fight Inflation

Sovos Brands is a premium packaged foods company that did an IPO in September 2021 and is growing annual revenues at a rapid pace. With rising food prices and inflation hitting consumers' wallets, SOVO offers an inflation-beating investment option with strong growth drivers. Rising fuel costs and supply chain challenges create some unforeseen expenses impacting profit margins in the short term, but the company is taking steps to mitigate those cost increases.
Seeking Alpha • Apr 05

Sovos Brands Will Continue To Execute For Shareholders

Sovos Brands sells four delicious brands: Rao's, noosa, Michael Angelo's, and Birch Benders. The management team has years of expertise in the CPG industry and will "leverage their playbook" to acquire and grow one-of-a-kind brands. Sovos’ sustainable top-line growth, combined with its returns and margins, will enable the business to compound its earnings and book value.
Analysis Article • Mar 22

We Think You Can Look Beyond Sovos Brands' (NASDAQ:SOVO) Lackluster Earnings

The market shrugged off the recent earnings report from Sovos Brands, Inc. ( NASDAQ:SOVO ), despite the profit numbers...
Analysis Article • Dec 23

Sovos Brands, Inc. (NASDAQ:SOVO) Shares Could Be 37% Below Their Intrinsic Value Estimate

In this article we are going to estimate the intrinsic value of Sovos Brands, Inc. ( NASDAQ:SOVO ) by taking the...
Seeking Alpha • Dec 16

Sovos Brands Stock: An Attractive Prospect For Growth Investors

Sovos Brands has done well to expand at a rapid pace in recent years. Sovos Brands' overall financial picture is encouraging and getting better, though it still has room for improvement. SOVO stock is pricey, but if growth continues, then the company could well be a good play for growth investors.
Seeking Alpha • Oct 01

Sovos Brands: Interesting Consumer Foods Play

Sovos Brands is acquiring emerging brands to combat consumer packaged businesses. The company has made some good acquisitions, notably Rao's. Valuations are a bit demanding, but given the pace of growth, perhaps not too demanding, certainly after a softer public offering.

Shareholder Returns

SOVOUS FoodUS Market
7D1.0%-0.6%1.6%
1Y63.4%-6.0%28.2%

Return vs Industry: SOVO exceeded the US Food industry which returned -7.8% over the past year.

Return vs Market: SOVO exceeded the US Market which returned 31% over the past year.

Price Volatility

Is SOVO's price volatile compared to industry and market?
SOVO volatility
SOVO Average Weekly Movement0.6%
Food Industry Average Movement5.6%
Market Average Movement7.2%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.0%

Stable Share Price: SOVO has not had significant price volatility in the past 3 months.

Volatility Over Time: SOVO's weekly volatility (1%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2017751Todd Lachmanwww.sovosbrands.com

Sovos Brands, Inc., through its subsidiaries, operates as a consumer-packaged food company that manufactures, distributes, and sells consumer food products in the United States. It operates in two segments, Dinner and Sauces, and Breakfast and Snacks. The company’s principal products comprise pasta sauces, dry pasta, soups, frozen entrees, frozen pizza, yogurts, pancake and waffle mixes, other baking mixes, and frozen waffles under the Rao’s, Michael Angelo’s, and noosa brands.

Sovos Brands, Inc. Fundamentals Summary

How do Sovos Brands's earnings and revenue compare to its market cap?
SOVO fundamental statistics
Market capUS$2.34b
Earnings (TTM)US$30.17m
Revenue (TTM)US$1.02b
77.6x
P/E Ratio
2.3x
P/S Ratio

Is SOVO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report (TTM)
SOVO income statement (TTM)
RevenueUS$1.02b
Cost of RevenueUS$714.66m
Gross ProfitUS$305.76m
Other ExpensesUS$275.59m
EarningsUS$30.17m

Last Reported Earnings

Dec 30, 2023

Next Earnings Date

n/a

Earnings per share (EPS)0.30
Gross Margin29.96%
Net Profit Margin2.96%
Debt/Equity Ratio89.9%

How did SOVO perform over the long term?

See historical performance and comparison

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/03/11 07:32
End of Day Share Price 2024/03/11 00:00
Earnings2023/12/30
Annual Earnings2023/12/30

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Sovos Brands, Inc. is covered by 12 analysts. 7 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Andrew LazarBarclays
Peter GalboBofA Global Research
Jason EnglishGoldman Sachs