NEW YORK (TheStreet) -- Shares of Keurig Green Mountain Inc (GMCR) are plunging, down 7.7% to $95.14 in early market trading Friday, after analysts at CLSA reduced its price target on the coffee machine maker earlier this morning.
The firm lowered its price to $103 from $108, while maintaining its "underperform" rating.
CLSA also cut its 2016 estimates after the K-cup maker gave its Kold system a higher-than-expected suggested price.
Analysts at the firm added that they now expect lower household penetration.
Keuris Green Mountain announced its new cold brewing coffee machine, "Keurig Kold," will not be released in all of its retail stores until 2016, which is later than investors expected.
Similarly, analysts at UBS slashed their price target on Keurig Green Mountain to $114 from $120, but kept its "buy" rating.
Waterbury, Vt.-based Keurig Green Mountain is a specialty coffee and coffeemaker business that sells single cup brewers as well as traditional whole bean and ground coffee in other package types including bags, fractional packages and cans.
Separately, TheStreet Ratings team rates KEURIG GREEN MOUNTAIN INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate KEURIG GREEN MOUNTAIN INC (GMCR) a BUY. This is driven by several positive factors, 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, expanding profit margins and increase in stock price during the past year. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 2.2%. 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.
- GMCR's debt-to-equity ratio is very low at 0.20 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.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Food Products industry and the overall market, KEURIG GREEN MOUNTAIN INC's return on equity exceeds that of both the industry average and the S&P 500.
- 46.36% is the gross profit margin for KEURIG GREEN MOUNTAIN INC which we consider to be strong. Regardless of GMCR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GMCR's net profit margin of 13.79% compares favorably to the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: GMCR Ratings Report