The company is expected to be able to grow its earnings by 25% per year over the next five years. This is the consensus analyst estimate. Sodastream has been growing earnings by 144% per year over the last five years.
It has been one of the fastest-growing companies from an earnings standpoint in the entire market. This is also one of the strongest growth stocks going forward in the market.
SODA is currently trading at 21.8 times forward earnings. This means SODA is still trading at a discount to its growth rate. It has a PEG ratio of 0.89.
When I take the current earnings of SODA, carry them at a 25% rate over the next five years and apply a multiple that I think is appropriate, I come up with a target price of $126. The company is currently trading at $70 dollars. Therefore, I think there is lots of upside potential.I require three things in stocks before I buy them: Performance, value and a healthy stock chart. Let's next take a look at a one-year chart of the shares: SODA passes my performance test. SODA passes my valuation test. SODA has a good, healthy stock chart. Now if we can just keep this market from rolling over! Of the 3,384 stocks that I track on a daily basis, SODA comes in at number 61 and earns an overall grade of "A." Data from Best Stocks Now App At the time of publication aggressive-growth clients of Gunderson Capital Management are long the stock. Follow @pwstreet This article was written by an independent contributor, separate from TheStreet's regular news coverage.