NEW YORK (TheStreet) -- Shares of SodaStream International (SODA - Get Report) are up 17.16% to $33.86 after it was reported that the Israeli maker of home soda machines is in talks with an investment firm about taking the company private, sources told Bloomberg.
The transaction would value the company at about $40 a share, or $828 million, 38% above yesterday's closing price, a source said.
Several private-equity funds have been looking at SodaStream for a leveraged buyout, sources added.
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 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, feeble growth in the company's earnings per share and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SODA's revenue growth trails the industry average of 17.7%. Since the same quarter one year prior, revenues slightly increased by 0.5%. 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 0.07 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 1.05, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 133.79% to $2.86 million when compared to the same quarter last year. Despite an increase in cash flow of 133.79%, SODASTREAM INTERNATIONAL LTD is still growing at a significantly lower rate than the industry average of 209.23%.
- SODASTREAM INTERNATIONAL LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SODASTREAM INTERNATIONAL LTD reported lower earnings of $1.96 versus $2.09 in the prior year. For the next year, the market is expecting a contraction of 5.6% in earnings ($1.85 versus $1.96).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Household Durables industry. The net income has significantly decreased by 85.3% when compared to the same quarter one year ago, falling from $12.08 million to $1.78 million.
- You can view the full analysis from the report here: SODA Ratings Report