Stifel Nicolaus is spitting out Green Mountain Coffee Roasters (Nasdaq: GMCR) again.

Sticking to its earlier sell rating, the well-regarded firm is warning that Green Mountain's popularity may be peaking.

Channel checks at more than two dozen Big Lots (NYSE: BIG) locations across the country find some of the more popular K-Cup flavors selling for 25% off average retail prices. Even if coffee prices have started to come down since last year's frenzied surge -- off 37% since last May -- discounts aren't necessarily welcome. It's also not a very encouraging sign when your product finds its way into the clearance bins and closeout shelves of Big Lots. Right?

However, let's hold the bear accountable.

Stifling reality check
Back in December, Stifel's Mark Astrachan was also waxing bearish on the company. He saw shipments from Green Mountain's Chinese manufacturer declining by 5% in October and 28% in November, inconsistent with company claims that brewer demand remained strong. His channel checks at the time also showed increased brewer promotional activity, including a presence at dot-com discounter Overstock.com (Nasdaq: OSTK). The analyst also argued that Green Mountain was losing market share to Starbucks (Nasdaq: SBUX) and that consumers were gravitating toward national brands over the regional favorites that Green Mountain had spent the past few years acquiring.

Astrachan's conclusion was that Green Mountain was in for a rough holiday quarter. How did that play out?

Well, revenue more than doubled to $1.16 billion during the three months in which Chinese imports were supposedly going the other way. Adjusted earnings more than tripled to $0.60 a share. What happened to the waning consumer demand? Green Mountain and its partners sold 4.2 million Keurig brewers during the quarter, and that's not too shabby, considering it sold 6.5 million brewers during the four previous quarters combined! What happened to the cascading margins one would associate with a shift to discounting? Profitability is growing faster than net sales.

Astrachan wasn't the only one who underestimated Green Mountain. The average analyst profit target for the holiday quarter was a mere $0.36 a share.

The skeptics simply forgot to consider that a presence at Overstock last year and Big Lots this year are ultimately signs of how mainstream Keurig's single-cup platform has become.

Holding the bulls accountable, too
Bears are entitled to their bragging rights. The stock has been pounded since topping out in the triple digits late last summer. Hedge fund superstar David Einhorn timed his bearish rant on Green Mountain perfectly.

Questions about the quality of Green Mountain's earnings and accounting practices, concerns about inventory levels, and fear over what will happen once its K-Cup patents expire in five months have outweighed the company's fundamentals.

Late last year Astrachan was targeting a profit of $2.38 a share out of Green Mountain in fiscal 2012. Today the consensus rests at $2.67 a share, and the most bearish of analyst forecasts is $2.40 a share.

Analysts see revenue soaring 61% and net income climbing 63% on a per-share basis this fiscal year ending in September. Bears remain comfortable shorting Green Mountain despite those projections, even though the stock is now trading at a forward earnings multiple in the mid-teens.

If fiscal 2013 is supposed to be Green Mountain's wake-up call, you wouldn't know it from Wall Street pros who are expecting revenue and profitability growing at 30% and 38% clips, respectively. And yes, these were the same cats who figured the company would earn a little more than half as much as it ultimately did during the holiday quarter.

Climbing the percolated wall of worry
A single dark cloud on the horizon is enough to suppress a hearty growth stock, and Green Mountain is heading into a storm. Between the looming patent expirations, Starbucks' entry into the single-serve coffeemaker market with an espresso-centric system, and many of Einhorn's still-valid concerns, Green Mountain is trading at a steep discount to its growth.

Does this mean that Green Mountain stock certificates will be selling alongside marked-down K-Cups at your local Big Lots? Don't bet on it.

If Green Mountain is able to continue silencing the critics who have been wrong in the past, it won't be long before investors ignore the naysayers in the future.

Brew ha ha
Shares of Green Mountain have popped nearly fivefold since I originally recommended the java heavy to Rule Breakers subscribers three years ago. It's clearly been a big winner for the growth stock newsletter service, but if you want to discover the newsletter service's next Rule-Breaking multibagger, a free report tells all. Check it out before it's gone.