Time To Buy Constellation Brands Stock?

September 3rd, 2025 by Trefis Team
STZ: Constellation Brands logo
STZ
Constellation Brands

Constellation Brands (NYSE: STZ) has dropped by 32% this year, significantly underperforming the S&P 500, which is up 9% ytd. The beverage company’s recent announcement that it’s lowering its fiscal 2026 sales and earnings outlook due to falling demand for its beers among the Hispanic population in the U.S. didn’t help either.

The key question for investors is whether STZ stock is a buy at its current price of around $150. Despite the seemingly low valuation, we believe the stock is risky due to several major concerns. Our conclusion is based on an analysis of Constellation Brands’ recent operating performance and its current and historical financial health. We have evaluated the company across key metrics, including Growth, Profitability, Financial Stability, and Downturn Resilience, and our findings indicate a weak operating performance and financial condition.

That being said, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 91% since its inception. Separately, see – Can Google Stock Unlock $1 Trillion After Antitrust Victory?

How Does Constellation Brands’ Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, STZ stock looks cheap compared to the broader market.

  • Constellation Brands has a price-to-sales (P/S) ratio of 2.7 vs. a figure of 3.3 for the S&P 500
  • Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 12.9 compared to 21.0 for S&P 500

How Have Constellation Brands’ Revenues Grown Over Recent Years?

Constellation Brands’ Revenues have fallen considerably over recent years.

  • Constellation Brands has seen its top line grow at an average rate of 3.2% over the last 3 years (vs. increase of 5.3% for S&P 500)
  • Its revenues have declined 0.5% from $10 Bil to $10 Bil in the last 12 months (vs. growth of 5.1% for S&P 500)
  • Also, its quarterly revenues fell 5.5% to $2.5 Bil in the most recent quarter from $2.7 Bil a year ago (vs. 6.1% improvement for S&P 500)

How Profitable Is Constellation Brands?

Constellation Brands’ profit margins are around the median level for companies in the Trefis coverage universe.

Does Constellation Brands Look Financially Stable?

Constellation Brands’ balance sheet looks weak.

  • Constellation Brands’ Debt figure was $12 Bil at the end of the most recent quarter, while its market capitalization is $27 Bil (as of 9/2/2025). This implies a Debt-to-Equity Ratio of 43.2% (vs. 20.5% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
  • Cash (including cash equivalents) makes up $74 Mil of the $22 Bil in Total Assets for Constellation Brands.  This yields a very poor Cash-to-Assets Ratio of 0.3% (vs. 7.2% for S&P 500)

How Resilient Is STZ Stock During A Downturn?

STZ stock has seen an impact that was slightly worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on STZ stock? Our dashboard Will You Be Comfortable Buying Constellation Brands Stock? has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

  • STZ stock fell 20.1% from a high of $261.05 on 2 December 2022 to $208.68 on 5 January 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 19 July 2023
  • Since then, the stock has increased to a high of $272.80 on 31 July 2023 and currently trades at around $150

Covid Pandemic (2020)

  • STZ stock fell 49.3% from a high of $208.34 on 20 February 2020 to $105.64 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 3 December 2020

Global Financial Crisis (2008)

  • STZ stock fell 62.8% from a high of $29.02 on 1 January 2007 to $10.80 on 12 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 13 July 2012

Putting All The Pieces Together: What It Means For STZ Stock

In summary, Constellation Brands’ performance across the parameters detailed above are as follows:

• Growth: Very Weak
• Profitability: Moderate
• Financial Stability: Weak
• Downturn Resilience: Moderate
• Overall: Weak

Based on our analysis, Constellation Brands shows weakness across key performance indicators, which is reflected in its current low valuation. While some investors might see this valuation as an attractive entry point, the stock is likely to remain under pressure until there are clear signs of improvement in beer sales.

For investors interested in the beverage sector, there may be more promising opportunities. For example, activist investor Elliott Management recently acquired a $4 billion stake in PepsiCo, a company that is also considered undervalued and has a strong chance of outperforming the market. For a more detailed look, you can read our latest analysis on PepsiCo – PEP Stock To $190?

While STZ stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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