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Why SodaStream (SODA) Is Up Today

NEW YORK (TheStreet) -- SodaStream (SODA - Get Report) gained 6% to $39.84 Monday after the announcement of a new partnership with Skinnygirl.

SodaStream and lifestyle brand Skinnygirl will work together to create a new line of flavors that will be marketed to women. The new flavors are expected to be available in the United States in the second half of 2014.

"Skinnygirl has inspired legions of consumers to bring a sense of lifestyle and quality to their beverage choices, and we are excited to now offer that experience to our users," SodaStream CEO Daniel Birnbaum said in a press release.

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TheStreet Ratings team rates SODASTREAM INTERNATIONAL LTD as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SODASTREAM INTERNATIONAL LTD (SODA) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SODA's revenue growth has slightly outpaced the industry average of 26.3%. Since the same quarter one year prior, revenues rose by 28.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SODA's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $4.95 million or 13.75% when compared to the same quarter last year. Despite an increase in cash flow, SODASTREAM INTERNATIONAL LTD's average is still marginally south of the industry average growth rate of 22.92%.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Household Durables industry average. The net income has decreased by 2.2% when compared to the same quarter one year ago, dropping from $16.77 million to $16.40 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SODA has underperformed the S&P 500 Index, declining 24.78% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: SODA Ratings Report

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