Amplify Snack Brands

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Amplify Snack Brands: A Better-For-You Emerging Growth Story

Summary

High level of scrutiny and doubts over this fast-growing, early-stage, better-for-you food company seem to be overdone.

SkinnyPop continues to perform well while the contribution from Tyrrells, Paqui and Oatmega should start lending meaningful support from next year onwards.

Profitability and balance sheet are strong enough to support a roll-up strategy without taking too much risk.

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SunTrust clips its price target on Amplify Snack Brands (NYSE:BETR) to $15 from $18 after digesting the food company's Q3 earnings report. The investment firm keeps a Buy rating on BETR with a positive long-term view still in place.

Credit Suisse moves to a Hold rating on Amplify after citing execution missteps.

Amplify's gross profit rate fell sharply to 47.6% of sales in the quarter due in part to a higher level of trade promotional activity and shift in product mix. The gross profit rate was 55.9% of sales a year ago.

Previously: Amplify Snack misses by $0.03, beats on revenue (Nov. 14)

seekingalpha.com/article/...se-balance-sheet-real-issues-ahead

Summary

Amplify Snack Brands serves ¨better¨ snacks, but investors are left with a sour taste.

While the company continues to show rapid growth, continued dealmaking has resulted in a huge debt load.

This leverage position is a bit of a worry amidst a compression in margins and operational challenges.

While shares have come under a great deal of pressure already, these are not fire-sale prices yet given the risks out there.