The Coca-Cola Co (NYSE:KO) faces what may be the company’s most significant challenge in its history. The Coca-Cola pros and cons have always driven the stock.

However, the trend away from sugary beverages has built a stronger case for the con side of the argument. With the majority of revenues coming from its flagship product, KO stock will not become a buy without a return to revenue increases and a lower valuation.

Lower Soda Consumption Has Hit KO Stock Hard

The Atlanta-based beverage giant stands as one of the most recognized brands in the world. Since the founding of The Coca-Cola Company in 1892, it has grown to distribute its products to all corners of the world. Between its flagship Coca-Cola and all of its beverage products, it sells tens of billions of beverage servings per day.

Still, concerns about the health effects of soda have led consumers away from the products of KO and peers such as PepsiCo, Inc. (NASDAQ:PEP), Dr Pepper Snapple Group Inc. (NYSE:DPS) and Nestle S A/S ADR (OTCMKTS:NSRGY).

This loss in popularity has led to a massive drop in revenue. The company brought in $46 billion in revenue as late as 2014. Consensus revenue estimates for this year stand at $31.5 billion. KO mitigated the revenue losses by the cutting cost of revenue and its sales, general and administrative expenses by a combined $10 billion since 2013. However, that strategy can only work up to a point.

KO began diversifying away from soda decades ago. Still, nearly 60 years after it purchased Minute Maid, the majority of its sales revolve around the “Coke” name in some form. Success outside of its flagship brand has been mixed at best.

As our own Vince Martin points out, companies such as National Beverage Corp. (NASDAQ:FIZZ) have beaten KO with sparkling water. KO also had to settle for a stake in Monster Beverage Corp (NASDAQ:MNST) as it failed to win in the energy drink market.

Also, the stock has barely doubled in value since the lows of 2009 and has seen little movement since 2015. The S&P 500 has grown by more than fourfold in that time.

Coca-Cola Pros and Cons

My colleagues have run the gamut with regard to Coca-Cola pros and cons. Laura Hoy, who described “3 Pros, 3 Cons” of KO stock, still came down firmly on the “con” side.

However, Will Ashworth lists KO stock among his “poorly performing Dow stocks to buy now.” Mr. Ashworth is intrigued by the company’s foray into alcoholic beverages in Japan. He also feels an alliance with Brown-Forman Corporation (NYSE:BF.A, NYSE:BF.B) would serve both companies well.

I’d agree that KO could revitalize its brand by selling a bottled version of popular mixed drinks mixed with Coca-Cola. However, with the concept limited to Japan and excluding its flagship product, I see only a limited benefit to KO investors.

Given all of the factors, I’m closest to the Lawrence Meyers on Coca-Cola pros and cons. He takes the view that it will be “compelling at some point.”

Like Mr. Meyers, I feel a forward price-to-earnings (PE) ratio of 21 for a company in recovery mode seems high. I also agree that the idea of the 7.5 oz. can of Coke is genius. Consumers can enjoy their guilty pleasure with less guilt, while the company sells its product at a higher price per ounce.

Between the smaller can idea and the concept of packaging rum and Coke, Coca-Cola stock can still be saved. Investors should also note that Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) continues to hold 400 million shares of KO. However, if you’re asking yourself, “Should I buy Coca-Cola stock?” I believe the answer is no at this time.

Final Thoughts on KO Stock

The Cola-Cola pros and cons have turned decidedly to the con side over the last few years. The falling consumption of sugary beverages has taken KO revenues down by over 30%. Moreover, the stock has risen much less than the S&P 500 from the lows of 2009.

Still, Warren Buffett continues to hold this stock. And compelling ideas exist that could revitalize the brand. However, I want to see a much lower PE and substantial revenue growth before I recommend buying KO stock.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks.