SodaStream International (SODA) shows no signs of fizzling out just yet. Estimates and shares are soaring after the latest earnings surprise and gives the stock a Zacks #2 Rank (Buy).
It may not be a good value, but the growth and investor sentiment is enough to give it a deeper look.
Company Description
SodaStream is headquartered in Israel and makes home beverage carbonation systems. The company’s countertop unit quickly carbonates tap water which you can then add any number of syrups to, creating soda in your kitchen. SodaStream emphasizes its minimal environmental impact as well as its cost savings for customers.
Revenues Jump 50%
SodaStream said its top line great 50% in its latest quarterly report on May 18. That puts revenue at roughly $64 million. Each region saw growth but the Americas region saw a 153% spike. Unit sales doubled to 592,000, so they are seeing plenty of new customers. Consumables were up 34% and should keep climbing given the influx of new users.
Earnings per share came in at $0.31, which was 11 cents better than expected and gave them back to back earnings surprises. The company had a recent IPO and Zacks has only been polling analysts for those 2 periods.
Estimates Bubbling Up
Along with the quarterly results the company raised its outlook for the year and analysts were right behind them. Estimates for 2011 are up 25 cents to an average of $1.41. Next year’s consensus jumped 28 cents, to $1.89.
SodaStream made $1.13 per share last year, so the expected growth rates are impressive at 24% this year and 34% next year.
Worth the Price?
A peek into the valuations will send value investors running and put this into a highly speculative category. The P/E is north of 40 times, but that give it a PEG of 1.3, which is not bad. However, the P/S near 5 and P/B of almost 7 are not too appealing.
But SODA is Red Hot
Valuations aside, investors and traders have really taken to the growth story here. Shares surged on the recent earnings news and continue to push higher despite the weight of the overall market lately.
Read the April 6th Feature Here.
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