Shares of at-home carbonation specialist Sodastream International Ltd (NASDAQ:SODA) closed up by more than 8% Monday after analyst David Kaplan of Barclays raised the firm’s price target on the stock to $100 per share.
For those of you keeping track, that’s nearly 82% higher than Barclays’ previous target of $55, and it also represents a 45% premium to Monday’s closing price at just above $69 per share. All told, shares of SodaStream are up almost 28% over the past month and 54% year to date in 2013.
So why all the optimism?
Kaplan believes that “conservative estimates for 20 percent top line growth are not priced in.” More specifically, he thinks Sodastream International Ltd (NASDAQ:SODA)’s sales will have increased 28% when all is said and done this year, followed by another 20% increase in revenue for 2014. He also says that as a result, earnings per share should come in around $2.55 this year and $3.28 in 2014.
Break out the bubbly!
Of course, investors have every reason to believe him; less than three weeks ago, SodaStream management outlined a perfectly reasonable plan to achieve sales of at least $1 billion by 2016. In fact, that announcement was enough to quickly prompt upgrades from analysts at both Oppenheimer and Citigroup, who both currently hold more conservative price targets of $68 and $66 per share, respectively.
What’s more, less than four weeks ago, the Israel-based company maintained its habit of crushing analysts’ estimates by turning in solid first-quarter earnings results. To be sure, it’s hard not to be impressed with Sodastream International Ltd (NASDAQ:SODA)’s first-quarter year-over-year revenue growth of 34% to $117.6 million. In addition, adjusted earnings per share managed to increase 24% to $0.68.
Better yet, the company’s razor-and-blade model is paying off, as carbonator refill revenue increased 101% and syrup sales rose 119% from the first quarter of 2012. Finally, soda-maker sales showed no signs of letting up after growing 78% from the same year-ago period, and the massive United States market should soon become SodaStream’s largest.
A better option
Finally, despite the fact that some folks might frown upon Sodastream International Ltd (NASDAQ:SODA)’s perceived unhealthy target market, I remain convinced this company really does want to make our lives better.
After all, while SodaStream offers a variety of flavor options, many of its customers aren’t particularly worried about calories as they take advantage of the system’s ability to make sparkling water at home for an average of just 25 cents per liter. Better yet, SodaStream machines cut down the number of plastic bottles otherwise required to distribute traditional soda, and each refillable Sodastream International Ltd (NASDAQ:SODA) carbonation canister can make between 60 and 110 liters, saving the equivalent of 170 to 310 aluminum cans.