Vita Coco Company (COCO) AI Stock Analysis

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Vita Coco Company

(NASDAQ:COCO)

Rating:79Outperform

Price Target:

$39.00

▲( 5.86% Upside)

Vita Coco Company exhibits strong financial performance with robust revenue growth and financial stability. The positive momentum from technical indicators supports potential upward movement. However, a high P/E ratio suggests the stock may be overvalued. The latest earnings call reinforces positive sentiment despite some operational challenges. Overall, the company is well-positioned for growth but with some cost-related risks.

Positive Factors

Earnings Performance

EBITDA of $22.5 million were above our estimate of $16.5 million.

Product Demand

Brand demand remains solid as evidenced by recent Vita Coco consumption growth of 20%, reflecting underlying category growth and improved product supply and in-stocks.

Sales Growth

First-quarter sales growth of 17% was aided by Vita Coco branded coconut water.

Negative Factors

Cost Pressures

From a cost perspective, ocean freight rates are expected to be a headwind, particularly early in the year, as the company works through inventory sourced at higher freight rates.

Margin Pressure

Management continues to expect FY25 gross margins of 35% to 37%, representing around 250 basis points of gross margin contraction at the midpoint.

Retail Challenges

Shelf resets at Walmart resulted in significant reduction in SKUs and shelf space, translating into mid-teen percentage year-over-year declines in weekly store sales at Walmart.

Vita Coco Company (COCO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.11B

Dividend YieldN/A

Average Volume (3M)864.34K

Price to Earnings (P/E)36.2

Beta (1Y)1.08

Revenue Growth8.01%

EPS Growth11.26%

CountryUS

Employees319

SectorConsumer Defensive

Sector Strength72

IndustryBeverages - Non-Alcoholic

Share Statistics

EPS (TTM)0.31

Shares Outstanding56,733,570

10 Day Avg. Volume1,088,816

30 Day Avg. Volume864,335

Financial Highlights & Ratios

PEG Ratio3.88

Price to Book (P/B)6.83

Price to Sales (P/S)0.00

P/FCF Ratio59.14

Enterprise Value/Market Cap0.83

Enterprise Value/Revenue0.85

Enterprise Value/Gross Profit8.77

Enterprise Value/Ebitda5.95

Forecast

1Y Price Target

$39.14

Price Target Upside6.24% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Vita Coco Company Business Overview & Revenue Model

Company DescriptionVita Coco Company (COCO) is a leading beverage company specializing in the production and distribution of coconut water and other natural beverages. Founded in 2004, the company has established itself as a pioneer in the coconut water industry, offering a range of products that cater to health-conscious consumers seeking natural hydration options. Vita Coco's core products include its flagship coconut water, along with flavored variations and other plant-based beverages, available in various sizes and packaging formats to meet diverse consumer needs.

How the Company Makes MoneyVita Coco Company generates revenue primarily through the sale of its coconut water and related beverage products. The company distributes its products through a variety of channels, including retail stores, e-commerce platforms, and foodservice channels. Key revenue streams include wholesale sales to retailers and distributors, direct-to-consumer sales via their online store, and strategic partnerships with major retail chains that help expand product reach. The company's earnings are bolstered by strong brand recognition, effective marketing strategies, and a growing consumer preference for healthier beverage alternatives. Additionally, Vita Coco continually explores new markets and product innovations to drive further revenue growth.

Vita Coco Company Financial Statement Overview

Summary

Vita Coco Company exhibits strong financial health. The income statement shows robust revenue growth and profitability improvements. The balance sheet is characterized by low leverage and high equity, pointing to financial stability. Cash flow analysis reflects solid cash management, though there is room for improvement in free cash flow growth. Overall, the company is well-positioned for sustainable growth within the non-alcoholic beverage industry.

Income Statement

Very Positive

The Vita Coco Company has demonstrated strong revenue growth, with a TTM revenue increase of 3.72% over the previous annual report. The gross profit margin stands at 37.27% for TTM, indicating effective management of production costs. A notable improvement is seen in the EBIT margin at 13.85% for TTM, up from the previous periods, showcasing enhanced operational efficiency. The net profit margin has also improved to 11.32%, reflecting better profitability. These metrics suggest a positive trajectory in income statement performance.

Balance Sheet

Very Positive

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.05, indicating minimal reliance on debt financing. The TTM equity ratio of 72.36% underscores strong capitalization, with a significant portion of assets financed by equity. Return on equity has improved to 21.80% in TTM, demonstrating efficient use of equity to generate profits. These factors point to financial stability and low-risk exposure.

Cash Flow

Positive

Vita Coco's cash flow performance is robust, with a free cash flow growth rate of -22.45% in the latest TTM period, although it remains positive. The operating cash flow to net income ratio is 0.55, indicating efficient conversion of earnings into cash. With a free cash flow to net income ratio of 0.54, the company sustains its ability to generate cash relative to net income. These metrics reflect solid cash flow management, despite a slight decline in free cash flow growth.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
535.24M	516.01M	493.61M	427.79M	379.51M	310.64M
	Gross Profit
199.51M	198.78M	180.73M	103.36M	113.15M	104.86M
	EBIT
74.15M	73.82M	56.49M	3.06M	24.59M	30.86M
	EBITDA
72.85M	71.53M	58.61M	14.06M	26.66M	46.52M
	Net Income Common Stockholders
60.60M	55.95M	46.63M	7.81M	19.02M	32.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
123.31M	164.67M	132.54M	19.63M	28.69M	72.18M
	Total Assets
289.04M	362.38M	285.68M	197.76M	197.48M	183.86M
	Total Debt
21.00K	435.00K	1.22M	48.00K	76.00K	25.06M
	Net Debt
-123.29M	-164.23M	-131.32M	-19.58M	-28.61M	-47.13M
	Total Liabilities
79.35M	103.56M	83.25M	56.66M	74.31M	81.56M
	Stockholders Equity
209.69M	258.82M	202.44M	141.09M	123.17M	102.22M
Cash Flow		Free Cash Flow
31.96M	41.92M	106.56M	-11.92M	-16.72M	32.93M
	Operating Cash Flow
33.37M	42.90M	107.16M	-10.94M	-16.17M	33.32M
	Investing Cash Flow
-1.41M	-974.00K	-594.00K	-982.00K	-557.00K	-375.00K
	Financing Cash Flow
-309.00K	-8.30M	6.29M	3.03M	-26.80M	2.05M

Vita Coco Company Technical Analysis

Technical Analysis Sentiment

Positive

Last Price36.84

Price Trends

50DMA

32.73

Positive

100DMA

34.47

Positive

200DMA

32.50

Positive

Market Momentum

MACD

1.14

Negative

RSI

61.92

Neutral

STOCH

86.83

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COCO, the sentiment is Positive. The current price of 36.84 is above the 20-day moving average (MA) of 34.17, above the 50-day MA of 32.73, and above the 200-day MA of 32.50, indicating a bullish trend. The MACD of 1.14 indicates Negative momentum. The RSI at 61.92 is Neutral, neither overbought nor oversold. The STOCH value of 86.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COCO.

Vita Coco Company Risk Analysis

Vita Coco Company disclosed 42 risk factors in its most recent earnings report. Vita Coco Company reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

We may issue additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise, which will dilute other stockholders. Q4, 2024

As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Nasdaq regarding our internal control over financial reporting. These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting. Reporting obligations as a public company place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel. Q4, 2024

The success of our financial performance is closely tied to our Americas operating segment. Q4, 2024

Vita Coco Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COCO	79 Outperform	$2.11B	36.19	24.86%	―	8.01%	11.26%
AKO.A	79 Outperform	$3.76B	13.19	23.07%	3.99%	13.22%	11.37%
FIZZ	77 Outperform	$4.27B	22.85	40.81%	―	0.34%	9.48%
Sector *	64 Neutral	$8.78B	14.55	4.78%	173.91%	3.39%	2.17%
ZVIA	54 Neutral	$218.95M	―	-28.87%	―	-6.83%	19.09%
OTLY	52 Neutral	$306.76M	―	-85.68%	―	4.56%	57.03%
BRFH	39 Underperform	$38.69M	―	-117.82%	―	22.04%	-21.72%

* Consumer Defensive Sector Average

Performance Comparison

COCO

Vita Coco Company

36.28

9.94

37.74%

AKO.A

Embotelladora Andina SA

20.84

7.51

56.34%

FIZZ

National Beverage

44.36

1.94

4.57%

BRFH

Barfresh Food Group

2.32

0.79

51.63%

OTLY

Oatly Group

10.25

-11.85

-53.62%

ZVIA

Zevia PBC

2.83

1.89

201.06%

Vita Coco Company Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 16.77%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

Despite strong growth in sales, particularly in international markets and new products, the company faces challenges with increased costs due to tariffs and distribution issues with Walmart. The improved inventory position and strategic initiatives provide optimism for the rest of the year.

Q1-2025 Updates

Positive Updates

Strong Sales Growth in Key Markets

Net sales in the quarter were up 17%, driven by growth of Vita Coco Coconut Water up 25%, benefiting from an acceleration of growth in the coconut water category and improvement in available inventory.

International Market Expansion

International segment net sales were up 17% with Vita Coco Coconut Water growing 36%, driven by strong growth across all major markets, particularly in the U.K. and Germany.

Improved Inventory Position

Entering the summer with a significantly stronger inventory position, allowing for normal promotional cadence and support for growth, particularly in the third quarter.

Continued Innovation and Product Expansion

Success of new products such as Vita Coco Treats contributing to 84% growth in the other product category. Expansion of SKUs in convenience stores and partnerships with food service providers like Joe's Coffee and Pete's Coffee.

Negative Updates

Impact of Tariffs on Cost

Introduction of a 10% baseline tariff on imports into the U.S., affecting approximately 60% of the global cost of goods sold. Potential reciprocal tariffs could further impact costs.

Challenges with Walmart Distribution

Changes in Walmart set causing a high single to low double-digit decline in sales, creating an estimated mid-single digit drag on total scan trends.

Higher Finished Goods Costs

Gross margins decreased due to higher year-on-year ocean freight rates and finished goods product costs, with gross margins down approximately 550 basis points from the previous year.

Company Guidance

During The Vita Coco Company's first quarter 2025 earnings call, key metrics highlighted included a 17% increase in net sales to $131 million, driven by a 25% growth in Vita Coco Coconut Water net sales. The company experienced a strong performance in its international segment, particularly in Germany, where volumes doubled compared to the previous year. In the U.S., the coconut water category grew by 23%, while Vita Coco Coconut Water itself saw a 20% increase in retail dollars. Adjusted EBITDA for the quarter reached $23 million, representing 17% of net sales, and net income attributable to shareholders rose to $19 million or $0.31 per diluted share. The company reaffirmed its full-year guidance, expecting net sales between $555 million and $570 million, with gross margins projected at 35% to 37% and adjusted EBITDA ranging from $86 million to $92 million. The call also noted strategic priorities such as expanding international markets, emphasizing innovation, and leveraging a strong inventory position to sustain growth amidst tariff uncertainties.

Vita Coco Company Corporate Events

Business Operations and StrategyFinancial Disclosures

Vita Coco Refutes Short Seller Claims, Reaffirms Outlook

Neutral

Mar 26, 2025

On March 26, 2025, The Vita Coco Company issued a press release addressing a short seller report by NINGI Research, which held a short position in the company’s stock. The company refuted the report’s claims, citing inaccuracies and reaffirmed its fiscal year 2025 outlook and long-term growth strategy. Despite past inventory constraints affecting private label service levels, the company remains confident in its governance and financial practices, with no material changes since its last earnings call.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.