SodaStream International Ltd. (NASDAQ:SODA) is seeing a big comeback right now. SODA stock has more than doubled in the last year. But can the home beverage company company keep it up?
This Zacks Rank #1 (Strong Buy) company has fine prospects, and SODA stock should make a valuable addition to your portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let us delve deeper into the other SODA stock factors which make SodaStream International Ltd. a good investment.
Sparkling Water Strategy Drives SODA Stock
The 2016 performance marked a comeback for this Israel-based manufacturer of home beverage carbonation systems with a market cap of around $1.11 billion. Its sparkling water brand helped revive the company and lift SODA stock.
In recent times, consumers have become particularly vigilant about the intake of carbonated, sugary drinks and increasingly shifting to healthier alternatives. According to recent reports, Americans consume more bottled water than soda.
Given the current trend, SodaStream International Ltd. is repositioning itself in order to capitalize on this growing demand for sparkling water. The Aqua Fizz launch marks SodaStream’s strategic shift from sweetened beverages toward sparkling water.
The growing popularity of sparkling water is driving SodaStream stock, as its cost-effective beverage carbonation systems help consumers transform ordinary tap water into soft drinks and sparkling water. Sparkling water maker unit sales rose 22% in 2016 and 37% in the first quarter of 2017 for SODA stock.
#1 – SODA Stock Performance
SodaStream’s shares increased 145.2% in 2016. Also, its shares have gained 31.2% year to date compared with the Zacks categorized Consumer Products-Miscellaneous Discretionary industry’s decline of 8.3%. Solid performance gives the stock a Momentum Score of ‘B’.
#2 – Earnings History and Future Estimate Revisions
SodaStream remarkably beat earnings estimates in each of the trailing four quarters, delivering an average positive earnings surprise of 121.24%.
The company’s earnings estimates have been trending upward lately. As a result, the current quarter consensus estimate has increased 8.5% in the last 60 days, while 2017 and 2018 earnings estimates grew 3.6% and 2.6%, respectively. Additionally, estimates for 2018 advanced 2.6% in the last 60 days, hinting at the solid prospects of the stock.
This positive trend signifies bullish analyst sentiment, and indicates robust fundamentals and expectations of outperformance in the near term.
#3 – SODA Stock EPS & Revenue Growth
SodaStream makes a great pick in terms of growth investment as well. The company currently has a Growth Score of ‘A’ on our style score system that helps us identify potential outperformers.
The company’s 2017 earnings are expected to increase 25.4%, while the industry’s average calls for EPS growth of 11.6%.
The company’s sales are also expected to increase 7.3% in the current year compared with the industry average growth of 0.0%.
Other Stocks to Consider
Investors can also consider other top-ranked stocks in the same space like The Container Store Group, Inc. (NYSE:TCS), Genius Brands International, Inc. (NASDAQ:GNUS) and Prestige Brands Holdings, Inc. (NYSE:PBH), each carrying a Zacks Rank #2 (Buy).
Full-year 2017 earnings at Container Store are expected to increase 32.1%.
Genius Brands has a Momentum style score “A”.
Prestige Brands is expected to witness 10.8% growth in 2017 earnings.
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