UPDATE: Stifel Downgraded SodaStream Based on US Slowdown
In a report published Thursday, Stifel analyst Jim Duffy downgraded SodaStream International Ltd. (NASDAQ: SODA) from Hold to Sell with a fair value estimate of $40 due to expected 2014 slow material growth.
SodaStream reported 3Q revenue of $145 million versus the analyst's estimate of $143 million and consensus of $145M. The company's EPS beat Duffy's and consensus estimate of $0.81 at $0.90. Global soda maker unit sales increased 27 percent with C02 refills up 34 percent for the quarter.
Total inventory YoY was up 43 percent and YoY Revenue Growth was up 29 percent. Revenue in Western Europe aided this top-line growth with $76 million versus the $63 million estimate and compensated for loss in the Americas and Asia-Pacific regions.
Duffy noted that the US slowdown, "the key growth market, " suggests structural challenges. The analyst commented, "In the context of the 40 percent US awareness figure referenced by management and the modest 1.2mn household implied installed base, we find the decline in return on marketing spend troubling."
Stifel added that the 30 percent 4Q revenue guidance is a "high hurdle" and expressed concerns over the implied attrition rates. Duffy lowered FY13 revenue from $567 million to $565 million. The analyst's adjusted 2013 EPS estimates also decreased from $3.04 to $2.97.
SodaStream closed at $56.87 on Wednesday and is currently trading at -3.37 percent.
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