Zevia (ZVIA, Financial) reported first-quarter revenue of $38.0 million, outperforming market expectations set at $37.3 million. The company has successfully achieved net sales at the higher end of its forecast and surpassed its goals for adjusted EBITDA. Leadership attributes this success to effective innovation and marketing strategies. They highlighted a new variety pack as the top-selling product at Walmart, complemented by a recent marketing campaign that achieved record engagement.
Furthermore, Zevia is reinvesting cost savings from its Productivity Initiative to bolster its brand. Looking forward, the company intends to enhance its marketing efforts to refine brand identity, expand its product innovation pipeline with improved taste profiles, and increase distribution to broaden market access. Zevia remains optimistic about its long-term potential in the rapidly evolving better-for-you soda market, emphasizing its unique position within the sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Zevia PBC (ZVIA, Financial) is $4.17 with a high estimate of $6.00 and a low estimate of $2.75. The average target implies an upside of 105.25% from the current price of $2.03. More detailed estimate data can be found on the Zevia PBC (ZVIA) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Zevia PBC's (ZVIA, Financial) average brokerage recommendation is currently 2.3, 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 Zevia PBC (ZVIA, Financial) in one year is $2.26, suggesting a upside of 11.33% from the current price of $2.03. 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 Zevia PBC (ZVIA) Summary page.
ZVIA Key Business Developments
Release Date: February 26, 2025
- Net Sales: $39.5 million in Q4 2024, an increase of 4.4% compared to Q4 2023.
- Gross Margin: 49.2%, an increase of 850 basis points from 40.7% in Q4 2023.
- Net Loss: $6.8 million, an improvement from a net loss of $9.2 million in Q4 2023.
- Adjusted EBITDA: Negative $3.9 million, improved by $3 million compared to Q4 2023.
- Cash and Cash Equivalents: $30.7 million at the end of Q4 2024.
- Full Year Net Sales: $155.1 million, a decrease of 6.8% from 2023.
- Full Year Gross Margin: 46.4%, up from 44.9% in 2023.
- Full Year Net Loss: $23.8 million, improved from a net loss of $28.3 million in 2023.
- Store Expansion: Increased presence from 800 to over 4,300 Walmart locations.
- 2025 Net Sales Guidance: Estimated between $158 million to $163 million.
- 2025 Adjusted EBITDA Guidance: Expected between $8 million to $11 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Zevia PBC (ZVIA, Financial) returned to top-line growth in Q4 2024 with a sales increase of over 4%, driven by increased volumes and expanded distribution.
- The company achieved a record high gross margin of 49.2%, an increase of 850 basis points from the previous year, benefiting from productivity initiatives.
- Zevia PBC (ZVIA) expanded its presence from 800 to more than 4,300 Walmart locations, significantly increasing household penetration and trial opportunities.
- The company is investing in marketing to drive awareness and trial, with a focus on amplifying its brand and differentiating on taste and ingredients.
- Zevia PBC (ZVIA) has a robust product innovation pipeline for 2025, including new flavors and variety pack offerings to drive trial and expand the consumer base.
Negative Points
- Despite the return to growth, Zevia PBC (ZVIA) reported a net loss of $6.8 million in Q4 2024, though this was an improvement from the previous year.
- The company faces challenges from increased competition in the 'Better for You' soda category, which could impact market share and growth.
- Zevia PBC (ZVIA) experienced a decline in full-year 2024 net sales by 6.8%, driven by lost distribution in select channels and increased promotional spend.
- The company anticipates a challenging Q1 2025 due to the impact of lost distribution from a mass customer and the discontinuation of certain product lines.
- Zevia PBC (ZVIA) is increasing marketing investments, which could pressure margins if not balanced with sales growth and cost management.
