Can Healthy Products Save Sodastream International Ltd (SODA)’s Earnings? by Estimize
SodaStream International Ltd. (SODA) Consumer Discretionary – Household Durables | Reports February 18, After Market Closes
Save Sodastream International Ltd (SODA)’s 4Q15 Earnings – Key Takeaways
- The Estimize consensus is calling for EPS of $0.18 and revenue of $109.15M, right in line with Wall Street’s estimates
- SodaStream has underperformed throughout 2015, missing on the top line in each of the last three quarters
- The company is taking an aggressive approach to expand its offerings to healthy water based beverages
- What are you expecting for SODA? Get your estimate in here!
For over a year, SodaStream has watched its share prices fall 31% amid weaker demand for its products and currency headwinds. Consumers are moving away from traditional soda for healthier alternatives, putting SodaStream and the carbonated soft drink market under significant pressure. Consequently, the company is pursuing an aggressive plan to reposition itself outside of its soda roots. Investors will find out whether the restructuring plan is working when SodaStream reports fourth quarter earnings February 18, after the market closes.
Seth Klarman: Investors Can No Longer Rely On Mean Reversion
"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More
The Estimize consensus is calling for EPS of $0.18 and revenue of $109.15, right in line with Wall Street’s estimates. Compared to Q4 2014, this represents a projected YoY decrease in EPS by 50% and revenue by 13%. The Estimize community has been bearish on Sodastream, revising its top and bottom line estimates down 8% and 4%, respectively, in the last 3 months.
Per SodaStream’s growth plan, the company is updating its products to focus on water based beverages catered to health conscious consumers. They recently introduced a range of naturally flavored water enhancers in the U.S and international markets. The launch has been supported with heavy investment in marketing campaigns and improved retail execution, potentially adding to its already soft earnings outlook. Furthermore, currency headwinds will hinder sales growth in the international operations. That said, with a rebranded SodaStream in full force, expectations are optimistic for better sales trends in 2016.
Do you think SODA can beat estimates? There is still time to get your estimate in here!