For investors wondering if Utz Brands at around US$9.35 is a bargain snack stock or a value trap, this article walks through what the current price actually implies.
The share price has been under pressure, with returns of a 14.8% decline over 7 days, 9.1% decline over 30 days, 9.1% decline year to date and 28.6% decline over the past year. This may have changed how the market is thinking about risk and potential reward.
Recent coverage around Utz Brands’ positioning in the packaged snacks category and its ongoing efforts to sharpen its brand portfolio helps explain why sentiment has been in focus. Investors are weighing how these developments relate to the current share price and what it suggests about the value of the underlying business.
On our valuation checklist, Utz Brands scores 2 out of 6, which points to some areas that screen as undervalued and others that do not. Next we look at different valuation approaches and later on consider a more complete way to think about what the stock might be worth.
Utz Brands scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today’s value to estimate what the business might be worth right now.
For Utz Brands, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $37.2 million. Analyst input and extrapolated estimates point to Free Cash Flow of $63.7 million in 2026 and $85.3 million in 2027, with Simply Wall St extending this path out for 10 years. By 2035, the model is working with a projected Free Cash Flow of $178.9 million, all in $ and all discounted back to today using the model’s required return assumptions.
Pulling this together, the DCF model arrives at an estimated intrinsic value of about $24.32 per share, which implies the stock is around 61.6% undervalued compared with the recent price of about $9.35.
For a profitable business, the P/E ratio is a useful gauge because it ties the share price directly to the earnings you are effectively paying for. It gives you a quick sense of how many dollars investors are willing to pay for each dollar of current earnings.
What counts as a “normal” P/E depends a lot on what the market expects for growth and how risky those earnings appear. Higher expected growth or lower perceived risk can support a higher P/E. Slower growth or higher risk usually points to a lower P/E being more reasonable.
Utz Brands currently trades on a P/E of about 144.2x. That is well above the Food industry average of about 24.4x and the peer group average of about 26.9x. Simply Wall St’s Fair Ratio framework estimates what a more tailored multiple could look like, given factors such as earnings growth, profit margins, industry, market cap and company specific risks, and arrives at a Fair Ratio of about 40.9x.
The Fair Ratio is more informative than a simple industry or peer comparison because it adjusts for Utz Brands own profile rather than assuming all companies should trade on the same benchmark multiple. Comparing the Fair Ratio of 40.9x with the actual P/E of 144.2x suggests the shares are pricing in more than this framework would imply.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple stories you create about a company that connect your view of its future revenues, earnings and margins to a financial forecast, a Fair Value and then a clear comparison with today’s share price.
On Simply Wall St, Narratives sit inside the Community page and give you an accessible tool that updates automatically when new information such as news, earnings or guidance arrives, so your Fair Value and decision-making framework for considering a stock stays aligned with what is happening at the company.
For Utz Brands, one investor might build an optimistic Narrative around expansion into California, earnings resilience and a Fair Value near the higher end of analyst targets around US$20. Another might focus on promotion reliance, changing snack preferences and a Fair Value near the lower end around US$13.50. By comparing each Fair Value with the current market price you can quickly see which story you think is more reasonable for your own decision making.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
