Shares of Zevia (ZVIA, Financial) plummeted by 16.29% after the company unveiled preliminary fourth-quarter results that failed to meet expectations. The stock currently trades at $3.70, a result of heightened losses primarily due to increased expenditures on its holiday campaign. Zevia now anticipates an Adjusted EBITDA loss between $3.9 million and $4.2 million, surpassing prior estimates of $1.8 million to $2.2 million. Despite the earnings setback, sales figures are expected to meet previous guidance and remain in line with consensus estimates.
Zevia's current market capitalization is approximately $221.68 million. Despite this recent drop in value, the stock has shown significant price fluctuations throughout the past year, with a 52-week high of $4.78 and a low of $0.62, reflecting a year-over-year increase of 113.08%. The company's Price-to-Book (PB) ratio stands at 3.06, which is close to its two-year high. It's important to note that while the stock appears overvalued according to its GF Value, investors should consider the company's growth trajectory and financial stability. The stock's GF Value is estimated at $2.20, indicating it is "Significantly Overvalued" according to GF Value.
On the financial health front, Zevia demonstrates strong attributes such as a robust balance sheet and an Altman Z-Score of 5.99, signifying financial strength. The company's Beneish M-Score of -3.63 indicates it is unlikely to be a financial manipulator. Additionally, Zevia's interest coverage appears comfortable, suggesting it can cover its debt obligations with existing cash flow, aligning with Ben Graham's preference for companies with an interest coverage of at least 5. However, a low Piotroski F-Score of 3 suggests potential concerns in business operations.
On the downside, revenue per share has declined over the last 12 months, and insider trading activity revealed significant insider selling with over 2.5 million shares sold in the past three months. Despite these concerns, the stock's recent inventory and sales growth are notable metrics to watch as they continue to disrupt the liquid refreshment beverage industry with their zero-calorie and naturally sweetened products.
Potential investors and current shareholders should keep a close eye on Zevia's upcoming earnings report scheduled for February 2025, which will provide further insights into the financial health and growth prospects of the company.
