SodaStream (NASDAQ:SODA) shares have been under pressure for around a year, and there seems to be no respite in store for investors. The company reported disappointing results for the first-quarter, witnessing a steep decline in net profit and a flat revenue performance. Moreover, its guidance for the year was also below consensus estimates. With competition from Keurig Green Mountain (UNKNOWN:GMCR.DL) and Coca-Cola (NYSE:KO) rising, SodaStream's troubles can multiply in the future.

Is there any hope for SodaStream going forward, or should investors stay away from this stock that's down almost 40% in the last year? Let's find out.

Looking beyond the drop
SodaStream's performance in the U.S. was quite pathetic amid a challenging holiday season. Sales of soda maker units in the U.S. were down 69% year-over-year to 80,000 and flavor units dropped 20% to 2.7 million. However, the positive side was that gas refill units increased 27%, clocking a record 1.4 million. But SodaStream management is of the opinion that this is a short-term phenomenon.

According to Yonah Lloyd, SodaStream's chief corporate development and communications officer, "The U.S. results do not reflect a limit for demand. Continued growth of CO2 refill units used in the soda machines, shows that SodaStream owners use it regularly." Looking ahead, the company is making a good move to turn around its business in the U.S.

In addition, SodaStream will be running a three-month promotional program at Wal-Mart's stores--the company is taking a 20-foot-shelf in 1,600 Wal-Mart stores to bolster its retail presence. The company believes that this program won't have a big impact on its gross margin. Since the price of its soda makers at Wal-Mart will be identical to its usual pricing, SodaStream can expect to see an improvement in sales.

Moreover, SodaStream has built a strong presence in over 17,000 retail outlets in the U.S., spanning high-end specialty stores to mass market stores. It can leverage this opportunity in the long run to turn around its fortunes in this market.

Focus on diversification and the product line-up
SodaStream's geographical diversification is an impressive part about its business. While its performance in the U.S. took a beating, it performed well in Western Europe with a revenue increase of 17%. This was mainly driven by a solid performance in various markets in Europe, such as Germany.

The Asia Pacific region also did well, and SodaStream expanded into Japan. To strengthen its position in the country, SodaStream acquired the assets of its former distributor in Japan and began direct distribution. This will give the company more control over its performance in the region going forward.

SodaStream is also focused on improving its product line up, which is already quite strong with a variety of soda makers at different price points. It has recently rolled out soda caps and a range of over 100 flavors such as Ocean Spray, Crystal Light, Kool Aid, and VH Splash. Also, its product pipeline includes "innovative new soda makers and flavors including single serve delivery options and new partnership agreements with Welch's, Sunny D, Skinny Girl and many more," according to management. 

A big threat
Product development moves are important for SodaStream, as the company will be facing competition from Keurig Green Mountain and Coca-Cola in the single-serve market. Earlier this year, Keurig Green Mountain and Coca-Cola entered into a 10-year partnership. Under the terms of their agreement, Coca-Cola bought a 10% stake in Green Mountain, which it has now increased to 16%. Both companies will collaborate over the next decade and offer Coca-Cola's products in K-Cups, or single-serve plastic pods. 

Coca-Cola will offer its products with Green Mountain's upcoming Keurig Cold system, which is expected to go on sale later this year. The Keurig Cold System will dispense cold beverages such as carbonated drinks, enhanced waters, juice drinks, sports drinks, and teas from Coca-Cola. Thus, a combination of Coca-Cola's massive product portfolio and Green Mountain's popular Keurig system will be a big threat for SodaStream.

Final words
SodaStream is coming off a difficult quarter. The company is trying hard to turn its business around and come out of the slump. However, this is easier said than done as the threat from a Green Mountain-Coke partnership is potent. Hence, investors should be cautious if they are thinking of investing in SodaStream.

However, those with a higher risk appetite might consider buying some shares as SodaStream is trading close to its 52-week low and is trying to get better. Also, the stock has a trailing P/E of 26 and a promising forward P/E of 18, suggesting earnings growth. Over the next five years, SodaStream's earnings are expected to grow at an annual rate of almost 30%, which makes it an enticing bet for those looking for growth. 

Renu Singh has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, Keurig Green Mountain, and SodaStream. The Motley Fool owns shares of SodaStream and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.