SodaStream (NASDAQ:SODA) is a recent IPO, only going public in late 2010. After its big rise in middle of 2011 and then followed by a steep fall, it seems like the valuations are more reasonable. However, the company could run into trouble because it doesn't have a solid moat or competitive advantage with its at home soda products. It may develop some sort of niche though but 20%+ growth is going to attract a lot of competition so I suggest giving the company more time to show investors its staying power. Below is an in depth look at the valuation metrics and stock chart.
Valuation: SodaStream's trailing 1 year valuation metrics suggest that the stock is undervalued as all of the metrics are below their respective 1 year averages. SodaStream's current P/B ratio is 3.2 and it has averaged 4.2 over the past year with a high of 5.5 and low of 3. SodaStream's current P/S ratio is 2.4 and it has averaged 2.9 over the past year with a high of 4.6 and low of 2.3. SodaStream's current P/E ratio is 25 and it has averaged 33 over the past year with a high of 52.4 and low of 23.
Price Target: The consensus price target for the analysts who follow SodaStream is $46. That is upside of 35% from today's stock price of $34.11 and suggests that the stock is undervalued at these levels. This also suggests that the stock has significant upside and is an attractive opportunity at these levels.
Forward Valuation: SodaStream is currently trading at about $34 a share with analysts expecting EPS of $2.01 next year, an earnings increase of 26% y/y, for a forward P/E ratio of 17. Taking a look at the company's publically traded comparisons will give us a better idea of the stock's relative valuation. Monster Beverage (NASDAQ:MNST) is currently trading at about $62 a share with analysts expecting EPS of $2.29 next year, an earnings increase of 19% y/y, for a forward P/E ratio of 27. National Beverage (NASDAQ:FIZZ) is currently trading at about $16 a share with analysts expecting EPS of $1.02 next year, an earnings increase of 7% y/y, for a forward P/E ratio of 15.8. Dr Pepper Snapple (NYSE:DPS) is currently trading at about $39 a share with analysts expecting EPS of $3.19 next year, an earnings increase of 9% y/y, for a forward P/E ratio of 12.1. The mean forward P/E of SodaStream's competitors is 18.3 which suggests that SodaStream is fairly valued relative to its publicly traded competitors.
Earnings Estimates: SodaStream has beat EPS estimates every time in the past 4 quarters. The company's EPS figures have come in between 4 cents and 17 cents from consensus estimates or about 19% to 80% from analyst estimates. The company has reported earnings that have differed from analyst estimates by a wide margin which suggests that the stock may experience upside from earnings surprises.
Price Action: SodaStream is down 16.5% over the past year, underperforming the S&P 500, which is up 10.1%. Looking at the technicals, the stock is currently below its 50 day moving average, which sits at $38.79 and below its 200 day moving average, which sits at $42.50.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.