Constellation Brands is scored 32 for moat and 48 for management. The management score rests on a return on invested capital of 10.5% and a gross margin of 51.6% — figures that describe returns closer to the cost of the capital behind them. Debt sits at 1.39x equity. A narrow moat alongside mixed management is a combination worth understanding before the price matters at all.
Three independent anchors set the price worth paying. Growth is modelled at 1.2% a year, the rate measured from the filings. The exit multiple assumed is 8.0x. That produces an intrinsic value of $23.33, a 10-CAP price of $121.34 and a payback time price of $102.43, with the value zone set at the highest of the three, $121.34. Today's price of $112.99 sits inside that zone.
The price sits inside the value zone, but the business scores 32 for moat and 48 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $112.99 |
| Market cap | $19.3B |
| P/E ratio | 10.8x |
| Return on invested capital | 10.5% |
| Gross margin | 51.6% |
| Debt to equity | 1.39x |
| Free cash flow yield | 6.5% |
| Growth rate used | 1.2% |
| Growth rate measured | 1.0% |
| Exit multiple assumed | 8.0x |
| Company | Moat | Buy price |
| Us Foods Holding Corp (USFD) | 72 | $65.50 |
| Tyson Foods (TSN) | 13 | $40.40 |
| Church & Dwight (CHD) | 62 | $48.65 |
| Jbs Nv-A (JBS) | 74 | $13.85 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Constellation Brands rather than accepting ours.