What Happened:
Shares of food and beverage supplier MGP Ingredients (NASDAQGS:MGPI) fell 17.4% in the afternoon session after the company reported fourth-quarter results and provided full-year revenue guidance that fell below analysts' expectations. The weak guidance likely reflects uncertainty regarding the macro picture, with the company highlighting several industry headwinds. Management added that "we continue to monitor the potential impact of inventory levels at distributors, overall American whiskey supply and consumption patterns, and inflation on consumers." On the other hand, MGP Ingredients blew past analysts' EPS expectations during the quarter. Its revenue also outperformed Wall Street's estimates. In particular, the company's premium branded spirits portfolio grew by an astonishing 50% year on year. Overall, it was a mixed quarter, with the market likely worried about the weak guidance.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy MGP Ingredients? Access our full analysis report here, it's free.
What is the market telling us:
MGP Ingredients's shares are not very volatile than the market average and over the last year have had only 6 moves greater than 5%. Moves this big are very rare for MGP Ingredients and that is indicating to us that this news had a significant impact on the market's perception of the business.
MGP Ingredients is down 20% since the beginning of the year, and at $78.46 per share it is trading 36.5% below its 52-week high of $123.62 from August 2023. Investors who bought $1,000 worth of MGP Ingredients's shares 5 years ago would now be looking at an investment worth $1,006.
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