Why SodaStream Shares Are Popping

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SodaStream International Ltd. (NASDAQ: SODA) reported its fourth-quarter financial results before the markets opened on Wednesday. The company said that it had $1.13 in earnings per share (EPS) on $157.7 million in revenue, which compares with consensus estimates from Thomson Reuters of $0.80 in EPS on revenue of $151.57 million. In the same period of last year, it said it had EPS of $0.71 and $131.8 million in revenue.

In terms of its product revenue breakdown for the quarter, the firm reported:

  • Sparkling Water Maker Starter Kits revenues increased 26.1% year over year to $71.5 million.
  • Consumables revenues increased 14.4% to $84.7 million.
  • Other revenues increased 38.2% to $1.5 million.

Looking ahead to the 2018 full year, the company expects to see EPS increase roughly 5% and revenues about 12% higher, compared to 2017 numbers. The consensus estimates are $3.33 in EPS on $593.63 million in revenue.

During the quarter, cash flow from operations less investing activities was $14.3 million, up from $11.6 million in the same period in 2016. Cash and financial investments totaled $155.2 million at the end of the quarter, compared with $57.3 million in the same period of last year.

Daniel Birnbaum, CEO of SodaStream, commented:

Our fourth quarter performance represents a terrific finish to an outstanding year for SodaStream. Throughout 2017 we successfully executed our growth plan aimed at expanding household penetration and increasing usage of our home carbonation system which translated into mid-teens revenue growth, record net income, and strong cash generation. These results underscore the strength of our brand and product offering and showcase the power of our business model. The work we’ve done bolstering our organization, improving our systems and processes, and enhancing our manufacturing capabilities has provided us with a much stronger foundation to capitalize on the many growth opportunities that still lie ahead and continue creating value for our shareholders.

Shares of SodaStream closed Tuesday at $78.61, with a consensus analyst price target of $70.13 and a 52-week range of $44.71 to $80.75. Following the announcement, the stock was up about 4% at $81.85 in early trading indications Wednesday.