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 International (SODA) were looking flat today, falling 11% after the countertop soda maker posted an uninspiring earnings report.
So what: SodaStream, one of the most shorted stocks on the market, had consistently proven the naysayers wrong by beating estimates each quarter, but that streak seemed to come to an end today. The company actually topped earnings estimates of $0.72 with an EPS of $0.76, but sales came up short. For fast-growing companies like SodaStream, the top line is often the key factor for the market, and revenue of $144.6 million was just below the consensus at $145.2 million. Sales were up strongly in the Americas and Western Europe, but fell in Asia, while sales of base units and consumables both grew in nearly evenly, a sign that the company is adding new customers and is not seeing the attrition that many critics expected.
Now what: Full-year revenue growth guidance of 30% was in line with estimates while guidance for net income growth was a little off at 23% vs. projections of 26%. Still, such a slight revenue miss seems like hardly a reason to scoff. Shares are starting look a cheap again after the latest drop as the stock now carries a forward P/E of 17. That's lower than both Coke and Pepsi. For a company with SodaStream's disruptive potential, that seems like a mistake. I'd say today's sharp sell-off is exaggerated.
