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Green Mountain Coffee Roasters (GMCR) Continues to Scale New Heights

Stocks in this article: GMCR KO KKD

NEW YORK (TheStreet) -- Green Mountain Coffee Roasters (GMCR) keeps on scaling to new heights as recent partnership deals continue to pull new investors into the stock.

By midafternoon, shares have added 7.6% to $119.29, adding to an overall 58% gain since the beginning of the year. Trading volume of 7.1 million is nearly double its three-month average daily volume.

Last Wednesday, the stock had a stellar run after announcing a 10-year partnership with The Coca-Cola Company (KO) to develop an at-home cold drinks system.

Then, on Monday, the company announced it had partnered with Krispy Kreme (KKD) in a multiyear agreement to develop Krispy Kreme coffee pods for use in Green Mountain's Keurig brewing system.

"At GMCR, we're committed to partnering with the best brands in the marketplace to bring consumers the beverages they love at the touch of a button," said Green Mountain CEO Brian P. Kelley in a statement.

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TheStreet Ratings team rates GREEN MTN COFFEE ROASTERS as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate GREEN MTN COFFEE ROASTERS (GMCR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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

  • GMCR's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 3.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GMCR's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GMCR has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Food Products industry and the overall market, GREEN MTN COFFEE ROASTERS's return on equity exceeds that of both the industry average and the S&P 500.
  • GREEN MTN COFFEE ROASTERS has improved earnings per share by 30.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GREEN MTN COFFEE ROASTERS increased its bottom line by earning $3.16 versus $2.28 in the prior year. This year, the market expects an improvement in earnings ($3.79 versus $3.16).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Food Products industry average. The net income increased by 28.5% when compared to the same quarter one year prior, rising from $107.58 million to $138.23 million.

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