PepsiCo (NASDAQ:PEP) is expected to release its third-quarter results on Oct. 3 before the market opens. With the stock rising 22% so far in 2019, investors may be wondering whether now is a good time to buy more shares, or to cash out. Let's look at how the stock has done lately and whether it could be poised for another good quarter.

Coming off a strong Q2

In July, the company reported a strong second quarter that saw it beating expectations for both revenue and earnings. It credits its success to healthier products, like its Bubly brand of beverages, and being able to find ways to continue to grow -- reasons it's optimistic. However, beating expectations is nothing new for PepsiCo, as only once during the past 14 quarterly reports has the company reported earnings that were not better than expected. Perhaps that's why the stock didn't get much of a boost from its Q2 results: Beating expectations may simply be par for the course. 

Is the company too dependent on North America?

PepsiCo's Frito-Lay and beverages segments made up $9.3 billion in sales, well over half (57%) of the $16.4 billion that the company's operations generated last quarter. North America is also the source of a lot of the growth. Latin American, which posted just $1.9 billion in sales in Q2, only grew at a rate of 2.3%. The Asia, Middle East, and North Africa segment, meanwhile, contributed just $1.6 billion in sales and was down from the previous year. 

pouring soft drink into glass

Image source: Getty Images.

The concern for investors has to be whether PepsiCo is too exposed to North American markets and whether at some point growth may be hard to come by, even in healthier food products.

But the company has been making efforts to expand in Africa, recently announcing its intention to purchase South African-based Pioneer Foods Group in a deal worth $1.7 billion. The company would complement PepsiCo's products with African products that could help grow sales in the sub-Saharan market. The deal is still contingent on a vote by Pioneer shareholders, but it is expected to close by Q1 of 2020. 

Key takeaways for investors

Even if PepsiCo comes out with another good earnings beat in Q3, that's not likely to have a big impact on the stock, since expectations are likely high given the excitement management had in Q2. While the company is working on ways to generate more growth using its new PepCoin loyalty program, long-term investors are likely going to be looking for something bigger, and that's where growth outside of North America is going to be the key.

But that's still a long way off, and today there are more reasons to sell the stock than there are to buy it. The impressive streak of beating earnings is good, but it also creates the expectation that it'll continue, which could put the stock at risk of a correction should that not happen. And with PepsiCo trading at a whopping 13 times its book value, it may be a bit of a tough sell for value investors, especially with the stock also trading near its high. 

For now, investors may be better off waiting for either a dip or some better growth prospects before buying shares of PepsiCo.