The Duckhorn Portfolio (NAPA) (love that ticker symbol) is one of only a handful of publicly traded wine names, and its shares may have an interesting ride here on Wednesday. After the market closed on Tuesday, Duckhorn filed an S-1 registration statement for the sale of 12 million shares of its stock held by existing shareholders; that figure could rise to 13.8 million shares if underwriters exercise their right to purchase more stock. The lockup period for NAPA shares expired Sept. 14. The company will receive none of the proceeds of this offering.
Since going public last March at $15 and closing the first day of trading at $19, NAPA shares have traded as high as $25.25 (intraday) and closed Tuesday at $22.40. Not surprisingly, the increase in share float is affecting the price, and today's action should be interesting to watch.
Last week, Duckhorn beat fourth-quarter earnings estimates on both revenue ($70.9 million vs. $60.2 million consensus estimate) and earnings per share (eight cents versus two-cent consensus). Company guidance for fiscal 2022 is for revenue in the range of $353 million to $360 million, with earnings per share in the range of 54 cents to 57 cents. Consensus estimates of 55 cents put the forward price-to- earnings (P/E) ratio at 41. Duckhorn is trading at 36x the 62-cent consensus EPS estimate two years out.
Duckhorn ended the fiscal year with $4 million in cash and $247 million in debt. Debt is down from $379 million at the end of last year, which in turn cut interest expense by $4.3 million this year. Net profit margins are pretty impressive at 16.6% for 2021.
Duckhorn owns about 730 vineyard acres (the equivalent of 1.14 square miles) in Napa, Sonoma, Mendocino, Benton and San Benito counties, leases 65 acres, and lists 48 as a combination owned and leased.
I'm just too cheap to pay 41x forward earnings for this name, but it is on my watch list and I'd consider a position if I could buy it on the cheap.
