Why SodaStream Shares Bubbled Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of SodaStream (NASDAQ: SODA  ) , which makes-in home beverage carbonation systems, bubbled higher by as much as 14% after its analyst day resulted in multiple price target boosts by Wall Street firms.

So what: SodaStream is certainly buzzed today, after analysts were pleased to hear the company is targeting $1 billion in revenue by 2016. This would imply a better-than-doubling in the $436 million in sales SodaStream delivered in fiscal 2012. On hearing this news, a slew of analysts lined up to raise their price targets. Included in this list was Oppenheimer, which boosted its target to $68 from $60; Canaccord Genuity, which upped its target to $59 from $52; and Monness Crespi Hardt, which raised its target to $80 from $70.

Now what: I had been quite skeptical of SodaStream for a while, but I think it certainly has the tools to succeed. SodaStream's price points of $80-$200 are right in the sweet spot where consumers are still buying, and its forward P/E of 20 is still reasonable considering its five-year projected growth rate of 25%. I'd probably suggest waiting for the share price to retrace a bit, as these analyst moves are rarely long-term growth drivers or pertinent to your investment thesis, but if you're in this for the next five years, and if forced to guess, I'd bet on seeing SodaStream shares head even higher.

Craving more input? Start by adding SodaStream to your free and personalized Watchlist so you can keep up on the latest news with the company.


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  • Report this Comment On May 16, 2013, at 1:53 AM, DocMonsta wrote:

    If your price target for the stock is $59 and the current stock price is $63...kind of seems bearish rather than bullish to me. Hard to believe that is an upgrade! Kind of like yelling "Lunch is served!" after everyone started eating.

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