What's Holding SodaStream Shares Down?

While operating earnings for SodaStream (NASDAQ: SODA  ) are up more than 100% year over year since this time in 2012, shares have only grown about in line with the S&P 500. What is holding SodaStream's share price back? In this video, Motley Fool consumer goods analyst Blake Bos discusses some market sentiments around the stock that are pushing the share price down despite SodaStream's incredible growth potential.

SodaStream's carbonation technology sounds simple, but this razor-and-blade company offers an intriguing opportunity for growth that could very well disrupt the soda industry. The Motley Fool's new premium report on SodaStream explains the opportunities as well as the risks in the company. The report comes with a year's worth of updates, so just click here to get started.


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  • Report this Comment On April 09, 2013, at 2:41 PM, hheiserman wrote:

    Blake,

    SodaStream (SODA) has a high percentage of 4- and 5-star reviews on Amazon, which is a plus.

    Also, SODA has room to run, based on the potential savings soda consumers pocket by switching to home-carbonation.

    Here's my thinking:

    KO serves 1.7 billion worldwide servings a day (2011 annual report), or 620 billion servings a year.

    Also, KO has 43% of the U.S. market (http://read.bi/14RmPtX). For purposes here, we'll assume this is also KO's global market share. So, about 1.443 trillion cola servings are consumed worldwide every year (620 billion/0.43).

    Let's also assume that a single serving costs a consumer $0.54. To get this number, I divide the $12.99 price for a case of Diet Coke at Office Depot) by 24 ( http://bit.ly/Y0KPDp

    Meanwhile, SODA claims the per-unit cost for a home-carbonated beverage is $0.25. http://bit.ly/14RmPtY

    Thus, home carbonation savings is $0.29 per-unit ($0.54 minus $0.25).

    With 1.443 trillion cola servings consumed worldwide a year, the world's consumers of fizzy drinks save $420 billion a year switching to SODA and other do-it-yourself methods. (1.443 trillion x $0.29).

    Last, let's estimate the cost savings-market value ratio. Divide that $420 billion of annual cost savings by SODA's $1 billion market value and you get 420x, meaning the annual costs savings is 420 times SODA's market value. By this measure, SODA appears to have a long runway of growth.

    hewitt

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