This analyst note destroys BrewDog's 'punk' stock offering: 'it is difficult to see how investors will make a financial return on this deal'

Brewdog drive a tank past the Bank of England to launch their first crowdfunding campaignBrewDogBrewDog drove a tank past the Bank of England to launch their first crowdfunding campaign in 2013

Popular Scottish craft brewery BrewDog looks like Europe’s most expensive brewery — and research firm All Street reckons you shouldn’t invest in it.

Naturally, BrewDog — which is selling “equity for punks” in its investment fundraiser — doesn’t see it that way.

BrewDog is currently crowdfunding £25 million to put towards growth and has already raised £5 million in just 20 days.

The funding drive puts a £305 million price tag on the Punk IPA maker and, at £47.50 a share, means it is valued at an eye-watering 115 times earnings.

All Street, a start-up that produces research on crowdfunding, points out that this probably makes it Europe’s most aggressively valued brewer.

For comparison, Heineken trades on 27.08 times earnings, Carlsberg is valued at 21.47 times earnings, Budweiser and Stella maker AB InBev is worth 21.83 times what it makes in profit, and Peroni brewer SABMiller is at 24.46 times earnings.

BrewDog, which also operates a chain of bars around the world, argues its growth story makes it worth it the hefty price tag, comparing the business to US burger chain Shake Shack. BrewDog’s sales grew by 64% last year and 70% the year before that.

But All Street isn’t convinced, given that BrewDog doesn’t give financial forecasts in its prospectus. They believe BrewDog could be being overly optimistic and reckon investors will struggle to make any money investing in the business at this valuation.

All Street’s founder and CEO Emanuela Vartolomei said: “BrewDog has performed exceptionally well. It is a strong company with sustainability at its heart and a talented workforce.

“However, it is difficult to see how investors will make a financial return on this deal given the high valuation of £305 million. No financial forecast has been disclosed so there is very little clarity as to how the company will hit the revenue targets required to generate a risk adjusted return for investors.”

FatcatBrewdogBrewDog founders James Watt (left) and Martin Dickie during a recent PR stunt

BrewDog disagrees.

Founder James Watt told Business Insider: “All investment opportunities attract a host of contrasting opinions from the supposed experts.

“Opinions are partial and do not give justice to the whole story and so I would respond by advertising that the Brewdog offer for subscription to issue B shares at a price of £47.50 each is made in accordance with a Prospectus which has been Approved by the Financial Conduct Authority in accordance with the Prospectus Rules.

“There are loads of details in our share prospectus and we would recommend anyone interested going to to download the prospectus to find out more about the opportunity to own part of BrewDog rather than relying on what All Street or, for an alternative view, what the Motley Fool might say who offered a different opinion to that of All Street.”

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