Is Ambev (ABEV) One of the Cheap Penny Stocks to Invest In?

Ambev (NYSE:ABEV) is one of the cheap penny stocks to invest in. Earlier in December, Barclays analyst Benjamin Theurer kept his Hold rating on the stock along with a $2.5 price target.

Previously, on November 26, Bernstein downgraded Ambev to Market Perform from Outperform with a $2.88 price target. The firm downgraded the stock due to valuation concerns following a 16% year-to-date gain. While the firm remains positive on Ambev’s long-term outlook, it warns that current market expectations are unrealistic.

In Q3 2025, Ambev’s performance was driven by the continued success of the company’s premiumization strategy. Volumes for premium and super-premium brands increased by more than 9%, allowing the premium segment to capture nearly 50% of the market share in Brazil. Beyond traditional beverage sales, Ambev’s digital ecosystem demonstrated explosive growth; the marketplace initiative saw its GMV soar 100% to an annualized BRL 8 billion, while the DTC platform, Ze Delivery, saw a 7% increase in GMV.

Despite these gains, the company navigated several negative headwinds. Beer industry volumes in Brazil were softer than anticipated, primarily due to unseasonably cold weather in the South and Southeast regions and constrained consumer purchasing power in the North and Northeast. In Argentina, beer volumes saw a mid-single-digit decline, underperforming the broader industry due to unfavorable pricing dynamics. Financially, Ambev reported a normalized net income of BRL 3.8 billion (up 7%) and a stated net income of BRL 4.9 billion, representing a 36% surge over the previous year.

Ambev (NYSE:ABEV), through its subsidiaries, produces, distributes, and sells beer, draft beer, carbonated soft drinks, malt & food, other alcoholic beverages, and non-alcoholic & non-carbonated products in Brazil, Central America and Caribbean, Latin America South, and Canada.

While we acknowledge the potential of ABEV as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.