SodaStream (SODA, Financial) stock has lost more than 60% of its value during the course of last 12 months. The organization is attempting to draw in buyers, and both sales and earnings are moving in the wrong direction. Then again, upside potential could be really touchy if SodaStream can get once more on track and enhance performance. Given the changes that the company has made over the past few months, I believe the company is a good turn-around candidate. The risk-to-reward ratio is in SodaStream’s favor; I think investors should consider buying the stock.
Following seven continuous years of twofold digit revenue development, SodaStream sales began leveling out and after that declining throughout the last few quarters. Performance was at first debilitating in the U.S., and shortcoming has now reached out to different markets, for example, Europe, a real topography for SodaStream.
SodaStream has an arrangement to ricochet in 2015. It's repositioning its marketing technique, accentuating the machine's capacity to make shining water rather than syrupy soft drinks that have dropped out of support in a nation fixated on adolescence heftiness. The pop business is confronting huge headwinds as buyers far and wide are progressively cognizant about the harming wellbeing effect of conventional pop utilization. This is harming enormous players, for example, Coca-Cola (KO, Financial) and PepsiCo (PEP, Financial), and its additionally being reflected in SodaStream's budgetary performance.
Administration is taking a shot at numerous territories to jolt development. The organization plans to change its internal organization, operations and distribution systems. Vitally, SodaStream will be transforming its center from home pop to carbonated water, and administration believes SodaStream investors will generously profit from this new method.
SodaStream is transforming its motto from "Set the Bubbles Free" to "Water Made Exciting," and the organization has as of late distributed a study demonstrating how owning a SodaStream machine can build the utilization of water and water-based beverages versus soft drinks and other sugary beverages. The principal thought is that SodaStream makes drinking water less demanding and more agreeable, which has positive well-being ramifications for purchasers. With sparkling water utilization on the ascent – especially enhanced shining water – SodaStream will in any event be riding a pattern that is moving in the right bearing this time.
Conclusion
Although SodaStream has been struggling for almost 12 months now, the company’s new initiatives show reap benefits in the long run. With the people being more aware of the ill-effects of soda on health, the company’s move to sparkling water seems to be logical and should steer the company back to its past valuations. Hence, I believe SodaStream is a buy at present valuations.
