VitaCoco (COCO, Financial) anticipates its gross margin to range from 35% to 37%. This projection is influenced by anticipated increases in average transportation and finished goods costs. However, these impacts are expected to be partly mitigated by planned net price hikes for VitaCoco Coconut Water and a higher volume mix of branded products compared to private labels.
The company also forecasts its adjusted EBITDA to fall between $86 million and $92 million. These financial expectations reflect the company's strategic efforts to balance cost pressures with pricing strategies and product mix enhancements.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for The Vita Coco Co Inc (COCO, Financial) is $37.00 with a high estimate of $45.00 and a low estimate of $32.00. The average target implies an upside of 17.27% from the current price of $31.55. More detailed estimate data can be found on the The Vita Coco Co Inc (COCO) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, The Vita Coco Co Inc's (COCO, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Vita Coco Co Inc (COCO, Financial) in one year is $29.36, suggesting a downside of 6.94% from the current price of $31.55. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Vita Coco Co Inc (COCO) Summary page.
COCO Key Business Developments
Release Date: February 26, 2025
- Net Sales: Increased 5% year over year to $516 million for the full year 2024.
- Vita Coco Coconut Water Net Sales: Grew 10% for the full year 2024.
- Private Label Sales: Declined 10% for the full year 2024.
- Gross Profit: $199 million for the full year 2024, up $18 million from the prior year.
- Gross Margin: 39% for the full year 2024, up 191 basis points from 2023.
- Net Income: $56 million or $0.94 per diluted share for the full year 2024.
- Adjusted EBITDA: $84 million or 16% of net sales for the full year 2024.
- Cash on Hand: $165 million as of December 30, 2024.
- 2025 Net Sales Guidance: Expected between $555 million and $570 million.
- 2025 Gross Margin Guidance: Expected between 35% and 37%.
- 2025 Adjusted EBITDA Guidance: Expected between $86 million and $92 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Vita Coco Co Inc (COCO, Financial) reported record annual net sales, net income, and adjusted EBITDA for 2024, driven by strong growth in the coconut water category.
- Coconut water category showed double-digit volume growth in major markets, with household adoption in the US increasing by 9% and household buy rate by over 77%.
- The Vita Coco brand experienced 9% retail dollar growth in the US and 21% in the UK, outpacing category growth in these regions.
- The introduction of the Vita Coco coconut water 1 litre pack into a key convenience store chain was highly successful, indicating consumer demand for larger packages.
- The company has secured additional production capacity for 2025 and 2026, providing greater supply chain flexibility and supporting anticipated growth.
Negative Points
- The Vita Coco Co Inc (COCO) faced significant inventory shortages in the summer due to limited ocean container availability, impacting third-quarter shipments and service levels.
- Fourth-quarter gross margins decreased due to more expensive ocean freight costs, and ocean rates remain elevated entering 2025.
- The company expects to lose some regions with certain private label retailers in 2025 due to previous inventory constraints affecting service levels.
- Walmart's store reset resulted in a significant reduction in SKUs and space for Vita Coco, causing mid-teen declines in weekly store sales.
- The company anticipates higher finished goods costs and elevated ocean freight rates in the first half of 2025, impacting gross margins.
