NEW YORK (TheStreet) -- Shares of SodaStream International Ltd. (SODA - Get Report) fell -3.03% to $38.71 today after Stifel Financial Corp. (SF - Get Report) said competition from bigger rivals will erode its profits. The Israeli maker of home soda machines declined to its lowest level since February 7.
In a note, Stifel said Coca-Cola Company's (KO - Get Report) partnership with Keurig Green Mountain Inc. (GMCR - Get Report) to bring out a system for producing single-serve cold drinks will mean a "loss of shelf space."
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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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 28.0%. Since the same quarter one year prior, revenues rose by 26.4%. 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 0.05 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 1.12, which illustrates the ability to avoid short-term cash problems.
- 45.18% is the gross profit margin for SODASTREAM INTERNATIONAL LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.40% trails the industry average.
- Net operating cash flow has declined marginally to $20.44 million or 8.63% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of SODASTREAM INTERNATIONAL LTD has not done very well: it is down 11.63% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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