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Bear of the Day: National Beverage Corp. (FIZZ)

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National Beverage Corp. (FIZZ - Free Report) makes LaCroix and other beverages. FIZZ stock has gone on a wild ride in 2021, as part of a wave of short squeezes that hit Wall Street earlier in the year. The company’s near-term earnings outlook has trended in the wrong direction and it might be a bit risky to take a swig of FIZZ shares.

Lost its Fizz?

National Beverage sells sparkling waters, juices, energy drinks, and some carbonated soft drinks, ranging far beyond its widely-popular LaCroix. The flavored seltzer brand, with multiple flavors, has been around for decades, but really kicked things into high gear over the last five-plus years as consumers searched for alternatives to sugary sodas.

LaCroix began to fly off shelves and helped create the current seltzer drink craze that’s spilled over into the alcoholic beverage market. National Beverage’s success saw PepsiCo launch its Bubly brand, while Coca-Cola bought Topo Chico in 2017 and launch its own sparkling water brand.

Plus, retail giants like Target TGT sell their own store brands and startups are popping up all the time. The crowded market makes things harder on National Beverage, and some brands have undercut LaCroix on price.

The stock is also currently heavily shorted (around 24% of float at last report), even after a short squeeze helped it skyrocket earlier this year. FIZZ has also seen its consensus earnings estimates slip. And of the two brokerage recommendations Zacks has for the stock, one is a “Hold” and the other is a “Strong Sell.”

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

National Beverage’s earnings revisions help it land a Zacks Rank #5 (Strong Sell) at the moment. FIZZ’s Beverages - Soft drinks space also sits in the bottom 25% of over 250 Zacks industries. Therefore, investors might want to stay away from FIZZ as it appears to be more of a trader’s stock at the moment.


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