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Actionable news in SODA: SodaStream International Ltd.,

SodaStream: No Longer A Soda Company

Summary

SodaStream has survived the onslaught of Keurig Kold and its partnership with Coca-Cola, as the product was officially discontinued on June 7, 2016 and the company offered refunds.

Company has pivoted successfully from a soda maker to a sparkling water maker with a focus on hydration, health, and wellness rather than soda-at-convenience.

Strong Q2 2016 results show that management is on the right track to more growth in the future.

Stock has broken a multi-year resistance point established in late-2014 and 2015.

It is not inconceivable for SODA to warrant a price of $38.48 per share in the near-term based on ($1.48 EPS annual x 26 current multiple) if positive progress continues.

SodaStream (NASDAQ:SODA) reported strong Q2 results today for FY2016: $119.2 million revenue compared to $99.8 million in the same quarter last year, and net income of $0.37 per share, which beat even the high estimate of $0.36 by a penny. On average, analysts' EPS expectations were $0.19.

Q2'15 net income was $3.5 million which means Q2'16's EPS of $0.37 is 120.8% higher than last year, but it is not an important comparison to make in my opinion. What matters the most is that the company is indeed profitable, and that revenue has increased despite some very dark clouds in 2015.

Keurig & Coca-Cola vs SodaStream: The 10-Month Siege
I had real doubts about SodaStream's survivability in 2015 when Keurig Green Mountain launched the Keurig Kold. Keurig's partnership with Coca-Cola (NYSE:KO) meant that their carbonation machine had the ability to make official Coca-Cola flavors such as Coca-Cola Classic and Sprite. This was a serious threat to SodaStream, whose customers had been sold on the convenience of making soda from home, yet could not make brand name sodas, and instead could only create sodas using SodaStream's proprietary flavors and mixes.

Keurig Kold's price point proved to be its downfall. It was simply priced way too high: $370, or 4.6x more expensive than SodaStream's $80 machine. As of June 7, 2016, the company has discontinued Keurig Kold and is offering refunds to customers-just 10 months since releasing the product. It is an absolute disaster in my...


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