WEBULL

Is BRC (NYSE:BRCC) A Risky Investment?

Simply Wall St · 2d ago

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. As with many other companies BRC Inc. (NYSE:BRCC) makes use of debt. But is this debt a concern to shareholders?

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Why Does Debt Bring Risk?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

How Much Debt Does BRC Carry?

As you can see below, BRC had US$35.0m of debt at September 2025, down from US$64.9m a year prior. However, it also had US$9.48m in cash, and so its net debt is US$25.5m.

debt-equity-history-analysis
NYSE:BRCC Debt to Equity History January 8th 2026

How Strong Is BRC's Balance Sheet?

We can see from the most recent balance sheet that BRC had liabilities of US$81.3m falling due within a year, and liabilities of US$66.9m due beyond that. Offsetting this, it had US$9.48m in cash and US$30.4m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$108.3m.

While this might seem like a lot, it is not so bad since BRC has a market capitalization of US$260.9m, and so it could probably strengthen its balance sheet by raising capital if it needed to. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if BRC can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for BRC

In the last year BRC had a loss before interest and tax, and actually shrunk its revenue by 3.4%, to US$391m. We would much prefer see growth.

Caveat Emptor

Over the last twelve months BRC produced an earnings before interest and tax (EBIT) loss. To be specific the EBIT loss came in at US$10m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled US$3.6m in negative free cash flow over the last twelve months. So suffice it to say we do consider the stock to be risky. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. For example BRC has 2 warning signs (and 1 which is concerning) we think you should know about.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.