National Beverage Stock Price is Too Juiced up to Buy Right Now

National Beverage Corp. (NASDAQ:FIZZ) is an American beverage company that develops, manufactures, and distributes sparkling waters, juices, energy drinks, and to a lesser extent, carbonated soft drinks. FIZZ's portfolio includes brands like La Croix, Shasta, Faygo, Everfresh, Rip It, ClearFruit, Mr. Pure, Ritz, Crystal Bay, Cascadia, Ohana Punch, Big Shot, and Double Hit.

National Beverage stock has added over 25% in the past 12 months, and it's added more than 20% in 2022. The stock is coming off an eight-month peak of $57.65, which was touched on $57.65, with support at the 20-day moving average capturing its recent pullback. FIZZ was last seen up 1% at $56.22. 

Options traders have been quite bullish lately. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day call/put volume ratio of 6.73, which sits higher than 88% of readings from the past year. This implies calls are much more popular than usual. 

Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.48 stands higher than just 2% of annual readings. This means short-term options traders have rarely been more call-biased. 

The beverage business is estimated to generate 5.4% revenue growth and 7.1% earnings growth for fiscal 2023. FIZZ is also estimated to increase its revenues and earnings by 5.3% and 10.5%, respectively, for fiscal 2024, signaling an expected improvement to the bottom-line growth rate. In addition, National Beverage maintains a manageable balance sheet with $48.05 million in cash and $61.25 million in total debt.

However, FIZZ has struggled to produce consistent top and bottom line growth in recent years. For fiscal 2022, National Beverage reported a 9% decrease in net income, despite growing revenues 6.1%. The beverage company has also grown its annual revenues and annual net income just 12.2% and 12.5%, respectively, since fiscal 2019, making FIZZ’s valuation appear much less attractive. Currently, National Beverage stock trades very rich at a forward price-earnings ratio of 31.06 and a price-sales ratio of 4.58, meaning it is undoubtedly overvalued.