SODA

Sodastream International Ltd

Consumer


Presented:07/31/2017
Price:$56.32
Cap:$1.27B
Current Price:$143.68
Cap:$3.26B

Presented

Date07/31/2017
Price$56.32
Market Cap$1.27B
Ent Value$1.09B
P/E Ratio22.71x
Book Value$20.23
Div Yield0%
Shares O/S22.50M
Ave Daily Vol293,507
Short IntN/A

Current

Price$143.68
Market Cap$3.26B
SodaStream International Ltd. operates as a holding company, which engages in the development, manufacture, distribution, and marketing of home carbonation systems. Its products include drink maker machines, soda caps, carbonators, reusable carbonation bottles, and flavored syrups. The company was founded by Peter Wiseburgh in 1991 and is headquartered in Airport City, Israel.

Publicly traded companies mentioned herein: Sodastream International Ltd (SODA)

Highlights

The presenter is short shares of Sodastream (SODA), expressing skepticism on the bull thesis of SODA managing to create a “razor/razor blade” model with its carbonator machines/CO2 cylinders, on which the bull thesis is predicated. Instead, the presenter views SODA as a cyclical business driven by machine sales, which is currently operating near peak revenues and earnings. As such, the presenter believes SODA is set to see both revenues and earnings, and consequently margins, contract over the next few quarters as distribution channels get filled and sell-through slows, contrary to consensus estimates of revenue growth and margin expansion due to increasing cylinder sales. Should this thesis prove correct, he thinks SODA could revert to a mid-cycle valuation of $20 per share, down from $56 today. NOTE: SODA reported Q2 earnings on August 2, 2017, and the earnings release can be reviewed here.

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Idea Discussion

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