Back to top

Analyst Blog

Zacks Investment Research downgraded SodaStream International Ltd. (SODA - Snapshot Report) to a Zacks Rank #5 (Strong Sell) on Jan 16 after this maker of home beverage carbonation systems announced lower-than-expected preliminary results for full year 2013.

Why the Downgrade?

On Jan 13, the company announced dismal preliminary results for full year 2013, the final results of which are expected in February. The company also expects weak results in the first half of 2014.

For 2013, SodaStream expects its revenues to be approximately $562.0 million, representing year-over-year growth of 29%, lower than the company’s earlier expectation of 30% growth. Revenues are also likely to fall short of the Zacks Consensus Estimate of $563 million.

Net income is expected to be $41.5 million in 2013, representing a year-over-year decline of 5.5% and in sharp contrast to management’s prior expectation of 23% growth. The company expects its adjusted net income to be approximately $52.5 million for 2013. The Zacks Consensus Estimate for 2013 earnings is pegged at $2.57 per share.

Though the company still enjoys double-digit revenue growth, its failure to achieve the desired margins during the holiday season along with a difficult consumer spending environment and currency headwinds resulted in a disappointing outlook for 2013. In order to push its products in certain markets during the holiday season, the company had to slash its selling prices despite higher product costs. Also, the company had to offer higher discounts than planned to lure its customers. A shift in product mix also remained a headwind during the holiday season.

Though the company is positive about its long term targets and expects to achieve $1 billion in revenues and net income margin between 15% and 18% by 2016, it does not foresee the consumer spending trend to improve in the next few quarters. In fact, SodaStream expects some of these headwinds to continue into the first half of 2014, signaling more weakness for the company.

Based in Israel, SodaStream commands a global leadership position in the home beverage carbonation market. Its soda making systems, sold mainly under the SodaStream brand, offer a healthier way to enjoy carbonated beverages at home. SodaStream’s products are primarily sold at retailers like Kohl’s Corp. (KSS - Analyst Report), Macy’s, Inc. (M - Analyst Report) and Bed Bath & Beyond, Inc. (BBBY - Analyst Report).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%