Shares of SodaStream (NASDAQ:SODA) hit yet another all-time intraday low during yesterday's early morning sell-off. We can't say that the market has left SodaStream for dead, because it seems as if Mr. Market keeps finding new ways to kill it.
However, maybe toiling away in the shadows is the best thing for the former market darling that once had Wall Street buzzing for its home-based water carbonation system. After all, SodaStream isn't going anywhere. As bad as things have been -- and seeing adjusted revenue plunge 28% since the prior year in its latest quarterly report is pretty bad -- it's probably in better financial shape than you might think.
SodaStream remains profitable. Its debt level is manageable. It may be experiencing a sales hit on its soda-making starter kits and syrup flavors, but it continues to experience growth in its high-margin CO2 refills. As bad as things may seem, at least we know that folks are still using these small kitchen appliances that turn flat water into seltzer. All SodaStream needs now is a catalyst to turn things around, and it may have that in SodaStream Ultimate.
SodaStream is betting that two product rollouts during the latter half of next year -- Mix and Ultimate -- will breathe new life into its brand and business. Mix is interesting, incorporating technology that will allow folks to carbonate any liquid.
However, SodaStream Ultimate is the one most likely to generate investor interest. SodaStream stock hasn't been the same since Keurig Green Mountain (UNKNOWN:GMCR.DL) peeled back the curtain on Keurig Kold, a system that makes hot and cold drinks including carbonated beverages. The announcement was made just as the world's largest soda company took a minority stake in Keurig Green Mountain.
SodaStream Ultimate is the response to Keurig Kold. When it hits the market in about a year or so, it will make purified and filtered hot and cold beverages. We're talking about both cold sodas and hot coffees, available in various serving sizes. There will also be an Internet of Things component to SodaStream Ultimate, allowing it to communicate with other devices. With Keurig Kold taking things slow with its mainstream rollout, this could be an opportunity for SodaStream to reestablish itself as a leader in the realm of beverage makers.
It won't be easy. Keurig Kold and SodaStream Ultimate may price themselves out of the market since the machines will likely cost quite a bit more than a stand-alone Keurig coffee brewer or a SodaStream soda maker. That would mean that, instead of figuring out who the victor will be in this niche, they are both ultimately losers. However, skeptics also shook their heads at the notion of single-serve coffee brewers and carbonated soft drink makers before Keurig Green Mountain and SodaStream reshaped the marketplace. For now, it's just comforting to know that SodaStream is working on its own reinvention.
Rick Munarriz owns shares of Keurig Green Mountain and SodaStream. The Motley Fool owns shares of SodaStream and recommends Keurig Green Mountain. 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.