Black Rifle Coffee Stock Is Turning Into a Well-Brewed Play


Are you aiming for superior returns? If so, Black Rifle Coffee (NYSE:BRCC) stock may be the right kind of ammo for the portfolio. Let me explain.

The facade of the New York Stock Exchange is decorated for the listing via a SPAC of Black Rifle Coffee Company (BRCC)

Source: rblfmr / Shutterstock

You know them well by now. Lucid Motors (NASDAQ:LCID). SoFi Technologies (NASDAQ:SOFI). QuantumScape (NYSE:QS). The list goes on. They’re among a group of popular diversified technology companies from a wave of highly hyped special-purpose acquisition companies (SPACs).

Unfortunately, they’re mostly a disappointing group of woefully, underperforming tech investments. But when looking at BRCC stock, we need to remember that not all SPACs are created equal.

BRCC stands out in a couple ways that should earn the attention of some investors. You see, this SPAC is all about the coffee.

A Quick Look at BBRC Stock

Black Rifle Coffee is here to get you out of bed in the morning and throughout the day. And that critical, albeit hardly high-tech mission sets the company largely apart from its “next big thing” SPAC peers.

To walk the aisle, BRCC isn’t a slave to outdated ways of doing business either. In fact, it’s a market disruptor in more than one way.

The first unique angle to Black Rifle is its market approach. BRCC is an online-first subscription model, rather than one mostly about the barista behind the counter. Unequivocally, that’s a 21st century way of doing business. What’s more, it has been a success.

Looking ahead, BRCC expects to grow 2021’s sales of $163 million to $199 million and its direct-to-consumer base of 285,000 to 325,000 by the end of 2023. Nice, right? And if we’re to trust Black Rifle’s total addressable market for direct-to-consumer coffee of around $4 billion, there’s potential for a much greater runway for growth.

As InvestorPlace’s Will Ashworth notes, the company also aims to grow in its smaller wholesale business by nearly 160% over the next couple years.

The prospects look good for BRCC. To be clear though, Black Rifle is still small potatoes and hardly threatening Starbucks (NASDAQ:SBUX). But BRCC doesn’t necessarily want the same things as the world’s largest coffee purveyor. The thing is Black Rifle Coffee is a disruptor in another potentially powerful way too.

Rather than wanting to serve triple mocha latte skinny’s to lounging liberal hipsters and drive-thru soccer moms, BRCC is taking aim at this country’s “forgotten” and more conservative base.

As the name insists, Black Rifle is politicized and it’s not about towing the line of a Bush dynasty and an old Republican guard.

With an ex-military foundation, including its Green Beret CEO, a vocal social media presence supporting military and law enforcement and plenty of shwag offering assault rifles and flags as inseparable rights, Black Rifle is receiving a supportive fist in the air from the Trump Train.

I have no allegiance to coffee, other than what’s on sale at the grocer. But that’s me.

Another hat tip to the coffee upstart is BRCC’s commitment to actively employ the veteran community in all aspects of its operations.

To be fair, a well-heard call to arms in 2017 to hire 10,000 vets in retort to Starbucks pledge to hire 10,000 refugees, is still well-short of that goal. Today, BRCC has a headcount of about 660 employees.

Appreciatively though, that could change in a fairly rapid manner.

BRCC Stock Daily Price Chart

Black Rifle Coffee Inc (BRCC) hammer pullback into test of support

Source: Charts by TradingView

Today Black Rifle has cash on hand of around $200 following its reverse merger, as well as obviously stronger visibility following its merger. Nice, right?

Bullishly, BRCC also has much greater access, if needed, to tap the markets for more capital to continue building its niche, but well-branded business. That’s agreeable too.

Sure, there’s some worries that shares have risen roughly 75% above the deal’s enterprise value of around $1.7 billion given its current revenue profile. It’s not a nosebleed price-to-sales situation like you’d find in LCID stock, but SBUX investors would certainly choke on their lattes.

Still, let’s face it, whatever the current financial picture, it’s unlikely to cause BRCC’s shareholder base to cry foul. As noted, the Trump Train is involved in BRCC stock.

And respectfully, that mob is also eyeball deep and mostly winning in a much sillier Digital World Acquisition (NASDAQ:DWAC) SPAC tied to Trump Media & Technology Group.

Therefore, it’s not a stretch to realize BRCC is going to make sense to its base. Maybe not at any price, but today the company is making the right moves and the stock has additional wiggle room as a growth narrative.

And given that BRC shares have pulled back from their most impassioned bid into a hammer test of channel and Fibonacci support, owning BRCC stock should look better to investors that have at least one thing in common with me.

Regardless of what you believe, BRCC isn’t a train to get in front of and bet against.

On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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