Bull of the Day: SodaStream (SODA)

Getting a commercial rejected from the Super Bowl telecast is turning out to be the best thing to happen to SodaStream International (SODA - Snapshot Report) in quite some time.

The maker of home beverage carbonation systems had its first ever Super Bowl commercial rejected by CBS, supposedly due to the references made to two of the biggest sponsors of the Super Bowl, Coke and Pepsi. It ran a shorter, and tamer, commercial during the game instead.

But the original commercial, entitled "Game Changer" has been put up on YouTube and has already garnered 4.3 million views and counting. Not too shabby for a company with a $990 million market cap making its first advertising push into the U.S. market.

Who's SodaStream?

SodaStream, headquartered in Israel, makes home soda makers, flavored syrups, gas cylinders and bottles. It entered the U.S. market in 2009. The U.S. market now makes up about a third of the company's sales and turned profitable in 2012. It sells its beverage systems in 15,000 retailers across the United States and in thousands of retailers worldwide.

Aggressive Growth

SodaStream went public on the NASDAQ in November 2010. Since then, it has been a growth machine. In 2012, earnings are expected to grow 57%. Analysts expect another 27% growth in 2013 and over the next 5 years, earnings are projected to grow 30.4%.

A Record Third Quarter

On Nov 7, the company reported record third quarter results. Revenue jumped 48.7% to $112.5 million as it saw gains in all geographic regions and product categories. Earnings rose 66.7% to 80 cents per share which beat the Zacks Consensus by 17.7%.

The company has been running circles around the analysts. It has surprised on every earnings report since it went public in 2010.

It is expected to report fourth quarter results on Mar 6. The Zacks Consensus Estimate is looking for 38 cents. Stay tuned.

Attractive Valuations

It's not every day that you can find a company with strong double digit earnings growth AND a valuation that isn't at nosebleed levels. SodaStream trades with a forward P/E of 18 which is more expensive than the S&P 500 at 13.5x, but compared with high growth peers, it is downright cheap.

It also has other solid fundamentals. SodaStream has a 1-year return on equity (ROE) of 18.1%, which is well above its peers at 10.6%.

SodaStream is a Zacks Rank #1 (Strong Buy). It's got the great combination of being a small cap aggressive growth company with still manageable valuations.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.