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Bull of the Day: SodaStream (SODA)

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SodaStream International Ltd. SODA continues to crush it. This Zacks Rank #1 (Strong Buy) recently reported record revenue for the first quarter and raised its full year outlook.

SodaStream makes and distributes home beverage carbonation systems called Sparkling Water Makers. These allow consumers to turn tap water into sparkling water and flavored sparkling water. Products are available at more than 80,000 retail stores in 45 countries.

Another Beat in the First Quarter

On May 2, SodaStream reported its first quarter results and beat the Zacks Consensus Estimate again. It reported earnings of $0.81 versus the consensus of $0.66.

It was the 11th earnings beat in a row, an impressive record.

Revenue rose 24.6% to a first quarter record of $143.6 million, up from $115.3 million in the first quarter of last year. Growth was primarily driven by Germany, the U.S., Canada and Australia.

It was the company's 25th consecutive quarter of double-digit growth in Germany.

Gross margin increased 250 basis points to 55.2% from 52.7% a year ago.

SodaStream also saw its global active user base rise, as gas refill units rose 9% to 8.3 million, a first quarter record.

Raised Full Year Guidance

SodaStream continues to see strong business in 2018.

It raised full year revenue guidance to an increase of 15% over 2017, up from 12%.

The company also raised full year earnings guidance which prompted the analysts to raise their estimates.

3 estimates have moved higher for 2018 in the last week, pushing the Zacks Consensus Estimate to $3.59 from $3.42 in that time. That's earnings growth of 9.1% compared to 2017 where it made $3.29.

One estimate was also raised for 2019 over the last 7 days, pushing the 2019 Zacks Consensus Estimate up to $4.04 from $3.93.

Shares Retreat From the Highs

SodaStream's stock has been on fire.

The shares retreated from recent highs after the earnings report, but they're still up 30% year-to-date compared to a decline of 0.9% for the S&P 500 over that same time.

Over the last year, the difference is even more stark as SodaStream is up 62.7% versus 11% for the S&P 500.

This is a growth stock. It trades with a forward P/E of 24, which is well above the average of the S&P 500 which is at 17.3x.

But for investors looking for a way to play the growth in the hot health and wellness markets, SodaStream is definitely one to keep on the short list.

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