MGP Ingredients (MGPI) AI Stock Analysis

• Market Cap: $656.62M
• Dividend Yield: 1.55%
• Average Volume (3M): 459.60K
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.78
• Revenue Growth: -15.89%
• EPS Growth: -68.54%
• Country: US
• Employees: 705
• Sector: Consumer Defensive
• Sector Strength: 72
• Industry: Beverages - Alcoholic
• EPS (TTM): 1.52
• Shares Outstanding: 21,270,344
• 10 Day Avg. Volume: 462,431
• 30 Day Avg. Volume: 459,595
• PEG Ratio: 0.80
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.93
• Price to Cash Flow (P/CF): 5.70
• P/FCF Ratio: 7.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $41.00
• Price Target Upside: 29.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

MGP Ingredients' overall stock score is moderate, reflecting a mix of stable financial health and challenging market conditions. The company's strong balance sheet and cash flow generation are offset by recent declines in revenue and profitability. Technical analysis indicates a downward trend, while valuation metrics suggest potential undervaluation. The earnings call highlighted ongoing challenges, particularly in the distilling solutions segment, while growth in premium brands offers some upside potential.

Positive Factors

Brown Goods Contracts

The company is effectively renegotiating Brown Goods contracts with its customers, which can be multi-year in nature, believed to foster significant goodwill with its customer base.

Ingredient Solutions Rebound

Ingredient Solutions is expected to rebound in 2025 with EBITDA ramping due to retrofit completion and onboarding of two new domestic customers.

Value Investor Potential

Value investors should consider accumulating shares as there is upside potential from current levels over the next year.

Negative Factors

Brown Goods Supply/Demand Imbalance

The 2025 outlook fell far short of consensus due to more severe impacts from Brown Goods supply/demand imbalance.

Distilling Solutions Weakness

Management now expects distilling solutions sales to decline 50% and gross profit to decline 65%, reflecting a more challenging market environment.

Spirits Industry Headwinds

Significant spirits industry headwinds persist, driven by oversupply and slowing consumption, especially from younger demographics.

MGP Ingredients Business Overview & Revenue Model

Company Description

MGP Ingredients, Inc. (MGPI) is a leading supplier of premium distilled spirits and specialty wheat proteins and starches. The company operates in two primary segments: Distillery Products and Ingredient Solutions. MGPI is renowned for producing a broad range of high-quality bourbons, whiskeys, vodkas, and gins, alongside its innovative ingredients used in food products. Headquartered in Atchison, Kansas, MGP Ingredients leverages its expertise in fermentation and distillation to serve a diverse clientele, including major beverage alcohol and food manufacturing companies.

How the Company Makes Money

MGP Ingredients generates revenue primarily through its Distillery Products and Ingredient Solutions segments. The Distillery Products segment is the company's largest revenue source, consisting of the production and sale of premium distilled spirits such as bourbons, whiskeys, vodkas, and gins. These products are sold to a variety of customers, including multinational beverage alcohol companies, small distilleries, and private label brands. The Ingredient Solutions segment contributes to revenue by providing specialty wheat proteins and starches used in food production. These ingredients are valued for their functional benefits in bakery, snack, and other food applications. The company's earnings are bolstered by its strategic partnerships and contracts with major beverage and food manufacturers, enabling steady demand and long-term customer relationships.

MGP Ingredients Financial Statement Overview

Summary

MGP Ingredients' financial statements depict a company with stable balance sheet metrics and strong operational cash generation. While profitability margins have shown mixed trends, the company maintains a healthy financial structure with manageable debt levels. The key risks lie in recent revenue and profit declines, which could impact future growth if not addressed.

Income Statement

MGP Ingredients shows a mixed performance in its income statement. The gross profit margin has improved over the years, indicating efficient production and cost management. However, the net profit margin has decreased significantly in the latest year due to a drop in net income, which raises concerns about expense management or revenue generation efficiency. Revenue growth rate has been inconsistent, with a decline in the most recent year, highlighting potential challenges in maintaining market position or demand.

Balance Sheet

The balance sheet reflects a solid equity position with a stable equity ratio, suggesting good financial health and low leverage risk. The debt-to-equity ratio indicates manageable debt levels, though it has slightly increased recently. Return on Equity (ROE) has decreased, which could be a concern if it continues, but overall financial stability remains robust.

Cash Flow

Cash flow analysis indicates a robust operating cash flow, which is a positive sign of the company's ability to generate cash from operations. However, free cash flow growth is limited due to high capital expenditures in recent years. The operating cash flow to net income ratio suggests efficient cash conversion, but the free cash flow to net income ratio is weaker, indicating potential constraints on liquidity.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
733.67M	703.63M	836.52M	782.36M	626.72M	395.52M
	Gross Profit
240.88M	286.32M	304.71M	253.31M	198.97M	98.81M
	EBIT
163.59M	74.43M	148.61M	148.97M	93.71M	54.24M
	EBITDA
143.84M	98.87M	170.51M	167.08M	117.00M	67.20M
	Net Income Common Stockholders
117.79M	34.66M	107.47M	109.46M	91.31M	40.34M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
25.27M	25.27M	18.39M	47.89M	21.57M	21.66M
	Total Assets
1.41B	1.41B	1.39B	1.16B	1.04B	366.57M
	Total Debt
214.20M	214.20M	301.86M	241.96M	240.40M	42.93M
	Net Debt
188.93M	188.93M	283.47M	194.07M	218.83M	21.27M
	Total Liabilities
573.24M	573.24M	543.28M	412.57M	397.20M	104.05M
	Stockholders Equity
832.54M	834.17M	850.49M	745.64M	644.26M	262.53M
Cash Flow		Free Cash Flow
36.69M	31.10M	28.52M	43.61M	40.87M	33.55M
	Operating Cash Flow
83.83M	102.28M	83.78M	88.94M	88.26M	53.26M
	Investing Cash Flow
-31.87M	-71.56M	-159.24M	-47.81M	-182.62M	-19.65M
	Financing Cash Flow
-51.72M	-23.80M	45.92M	-14.76M	94.29M	-15.26M

MGP Ingredients Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGPI, the sentiment is Negative. The current price of 31.57 is below the 20-day moving average (MA) of 32.31, below the 50-day MA of 33.92, and below the 200-day MA of 60.01, indicating a bearish trend. The MACD of -0.77 indicates Negative momentum. The RSI at 43.02 is Neutral, neither overbought nor oversold. The STOCH value of 31.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGPI.

MGP Ingredients Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TAP	74 Outperform	$12.09B	11.15	8.54%	3.00%	-0.64%	22.45%
BF.A	70 Outperform	$16.39B	16.49	27.99%	2.55%	-5.11%	3.64%
BF.B	70 Outperform	$16.39B	16.64	27.99%	2.53%	-5.11%	3.64%
MGPI	63 Neutral	$656.62M	19.82	4.07%	1.55%	-15.89%	-68.54%
Sector *	62 Neutral	$20.59B	13.94	-10.15%	7.39%	1.47%	7.35%
SAM	61 Neutral	$2.57B	46.28	5.99%	―	0.21%	-20.69%
STZ	61 Neutral	$32.77B	48.55	7.94%	2.23%	3.69%	-55.78%

MGP Ingredients Corporate Events

MGP Ingredients Redesigns Long-Term Incentive Program

On March 11, 2025, MGP Ingredients, Inc. announced a redesign of its annual long-term incentive program, incorporating performance stock units with financial performance goals and time-vested restricted stock units to motivate future service and performance. This new program aims to align the company’s compensation practices with industry standards and enhance its ability to retain and incentivize key personnel, potentially impacting its operational effectiveness and market competitiveness.

MGP Ingredients Directors Plan Stock Sale

Members of the Board of Directors at MGP Ingredients, Inc., including Donn Lux, Karen Seaberg, and Lori Mingus, are planning to sell shares of the company’s common stock. These sales, which are part of their long-term financial and estate planning, do not indicate any lack of confidence in the company’s strategic vision or growth prospects, as the directors maintain significant equity stakes.

MGP Ingredients Updates Short Term Incentive Plan

On February 12, 2025, MGP Ingredients’ Board of Directors approved updated terms for their Short Term Incentive Plan (STIP), effective January 1, 2025. This plan aims to motivate employees through performance-based incentive awards. Key details include eligibility for executive officers and certain non-union employees, the creation of a cash bonus pool based on company performance, and provisions for payouts in cases of termination due to death, disability, or change in control. The STIP aligns employee incentives with company performance, potentially enhancing operational efficiency and employee satisfaction.

MGP Ingredients Announces Leadership Changes and Strategic Focus

MGP Ingredients, Inc. has announced leadership changes with Brandon Gall appointed as Interim President and CEO, succeeding David Bratcher, who will retire. Donn Lux will become Chairman of the Board, succeeding Karen Seaberg, as the company seeks a permanent CEO to steer its growth in the branded spirits industry. The company reaffirms its 2024 sales and earnings guidance, with capital expenditures adjusted due to delays in construction. These changes are poised to impact MGP’s strategic initiatives and strengthen its position in the market.