Sports nutritional products maker BellRing Brands Inc. (NYSE: BRBR) has seen its stock surge to new all-time highs driven by the popularity of GLP-1 weight-loss medication usage. While the name of the company may not sound familiar, this consumer staples company's products are commonly found at grocers, gyms, convenience stores, and health food stores. You’ve likely heard of PowerBars, a tasty protein-rich snack bar.

Premier Protein drinks and Dymatize shakes may be more familiar to athletes. Still, they all have the common theme of providing protein for healthy snacking, energy and muscle growth and recovery. BellRing was itself a spin-off from consumer packaged goods maker Post Holdings Inc. (NYSE: POST), known for brands including Pebbles, Peter Pan, Eggbeaters, Bob Evans, 9Lives, Kibbles ‘n Bits and Gravy Train dog food.

GLP-1 weight loss tailwinds

The GLP-1 weight-loss medication trend has taken the mainstream by storm as pharmacies can’t keep products like Ozempic and Wegovy produced by Novo Nordisk A/S (NYSE: NVO) on the shelves. As more patients take GLP-1 weight loss medications, Belling’s proprietary research has shown these consumers become heavy users of protein shakes. Protein shakes are often used as a meal replacement to help reduce total caloric intake.

BellRing CEO Davenport commented, “Products like Premier Protein are perfect because they are delicious, compact-size, high-protein nutrition, giving these individuals what they need without making them feel overly full. Research also indicates that once on the medication, consumers start exercising more and choosing healthier food and beverage options, ultimately increasing the demand for convenient and sports nutrition products.”

Donuts are out, protein snacks are in.

Analysts downgraded sugary high-calorie snacks this year, like Krispy Kreme Inc. (NASDAQ: DNUT) and chocolate behemoth Hershey Co. (NYSE: HSY), due to Ozempic use. If donuts and candies are out, then protein snacks would logically be the new trend to accompany the GLP-1 mania. Ozempic and protein snacks go hand in hand, as evidenced by BellRing’s numbers.

A simple business

BellRing sells products under just three brands. PowerBar is a popular energy and protein bar designed as a healthy snack for active individuals and athletes. Premier Protein shakes are loaded with high protein and low sugar and are meant as a healthy drink or meal replacement snack. It also sells energy and protein bars. Dymatize is a brand of protein powders and nutritional supplements designed for athletes to support muscle growth and recovery. They offer whey protein, casein and creatine supplements. Check out the sector heatmap on MarketBeat.

Flexing and pumping profits and growth  

On Nov. 20, 2023, BellRing released its fiscal fourth-quarter 2023 results for the quarter ending September 2023. The company reported an earnings-per-share (EPS) profit of 41 cents versus consensus analyst estimates for a profit of 40 cents, a penny beat. Adjusted EBITDA was $98.5 million, and net earnings were $46.1 million. Revenues surged 24.6% YoY to $472.6 million, beating analyst estimates of $462.65 million.

In fiscal year 2023, net sales were $1.67 billion, with an operating profit of $287.3 million and net earnings of $165.5 million. Adjusted EBITDA was $338.3 million. The company generated $215.6 million in cash from operations.

In-line lowball guidance

BellRing expects fiscal full-year 2024 net sales between $1.83 billion and $1.91 billion and adjusted EBITDA between $360 million and $390 million. This could be a case of lowballing.

Protein consumption powering growth.

Premier Protein and Dymatize hit new highs across many key metrics. Premier Protein regained the households and total points of distribution (TPDs) it had previously lost in prior years as a result of capacity and supply chain constraints. Production grew 17% YoY to meet the demand. Health and wellness and fitness tailwinds drove the convenient nutrition category higher by 9% in fiscal Q4 2023. RTD led the category with 21% and RTM with 11% YoY growth.

This drove Premier Protein shake consumption to accelerate by 36% in the quarter. It maintained its position as the number one brand in the RTD segment and added 1% for a total household penetration of 16%. Dymatize saw consumption grow by 36% YoY in the quarter.

CEO Insights

CEO Davenport notes that full-year 2023 saw sales rise 23% YoY. Their ready-to-drink (RTD) and ready-to-mix (RTM) segments experienced double-digit growth for the past three years. Long household penetration and strong macro trends like GLP-1 usage ensure a long runway for growth. She concluded, “I'm thrilled with our performance this year. We continue to gain momentum in every part of our business. Strong macro trends are driving sustained long-term growth in our categories. Premier Protein and Dymatize continue to reach new consumers and maintain all-time high market share positions."

BellRing Brands analyst ratings and price targets are at MarketBeat. BellRing Brands peers and competitor stocks can be found with the MarketBeat stock screener.

Weekly ascending triangle breakout  

The weekly candlestick chart for BRBR illustrates the ascending triangle breakout, grinding shares to new all-time highs. The flat-top horizontal upper trendline formed at $41.55, while the ascending lower trendline formed at $35.47 in July 2023. The weekly relative strength index (RSI) rose through the overbought 70-band in August 2023 and triggered the breakout as BRBR rose to new all-time highs.

The daily market structure low (MSL) breakout formed on the $49.18 trigger as shares peaked at $51.35. The weekly RSI has been in overbought territory for four months as it continues to climb to the 81-band. Pullback support levels are at $44.37, $41.55, $37.03 and $35.47.