SodaStream Is Faster Than Coke or Pepsi

SodaStream (NASDAQ: SODA  ) keeps wooing soda sippers.

The company behind the popular beverage maker that bears its name posted better-than-expected results this morning. Revenue rose 34% to $117.6 million, fueled by a surge in stateside sales and continued resilience through Europe. Earnings rose 20% to $12.1 million or $0.57 a share.

Analysts were holding out for net income of $0.54 a share on $113.1 million in revenue.

Margins contracted despite a spike in higher margin consumables as carbonators and flavors saw their sales grow faster than starter systems. This is typical. Folks who get SodaStream beverage makers during the holidays are now starting to buy consumables. Just wait until the weather warms up and soda consumption starts to increase.

As you can probably imagine, the Israeli-company has seen robust sales stateside. Unit sales of soda makers, gas refills, and syrups rose 78%, 101%, and 119%, respectively, during the quarter. Asia-Pacific sales declined, but European sales managed to post double-digit gains as SodaStream's most established market.

A strong report would lose some zing if it weren't accompanied by a boost in guidance, and SodaStream is doing that. It now sees revenue and earnings growth of 27% and 20%, respectively, this year -- up 200 basis points on both ends of the income statement.

To frame that growth alongside the industry's two pop stars, analysts see Coca-Cola and PepsiCo growing their revenue this year by no more than 3.5%. Yes, Coke and Pepsi are brand-name juggernauts, but why is SodaStream selling for a lower forward earnings multiple?

The shares opened lower on the news, and that's understandable. It was a strong quarter, but the stock has risen more than 80% over the past year.

Let the skeptics in. Let the shares take a breather. SodaStream is likely to come back with another blowout quarter in three months as the seasonally potent summer season kicks in.

Pop life
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 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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