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Sodastream International Ltd (SODA) Should Bounce Back

Sodastream International Ltd (NASDAQ:SODA)The market fizzed higher last week, but Sodastream International Ltd (NASDAQ:SODA) went the other way.

Shares of the company behind the beverage appliance that turns tap water into sparkling soda tumbled 12% last week, as buyout chatter fizzled.

It also doesn’t help that we appear to be coming out of what was a ho-hum quarter for soda consumption.

Coca-Cola Enterprises Inc (NYSE:CCE) — the regional bottler of pop that rules over Western Europe — hosed down its near-term prospects last month.

“Throughout 2012 and so far this year, we have faced challenging operating conditions, including persistent underlying macroeconomic weakness, significant headwinds from poor weather, the prolonged impact of a sharp excise tax increase in France, and a dynamic competitive environment in Great Britain,” CEO John Brock warned ahead of a conference presentation.

It’s not just a leading bottler smarting. The Coca-Cola Company (NYSE:KO) itself reports tomorrow, and it’s probably not going to be as refreshing as its namesake soft drink. Analysts see a marginal uptick in profitability and a 1% decline in revenue.

Sodastream International Ltd (NASDAQ:SODA) would seem to be caught up in the same headwinds facing Coca-Cola Enterprises Inc (NYSE:CCE) and The Coca-Cola Company (NYSE:KO) . Sugary soft drinks are being played up as unhealthy refreshments for children, and the unseasonably cool spring, and rainy June, probably scaled back demand for soft drink satisfaction.

Coca-Cola Enterprises has challenges across the Atlantic, but Western Europe is Sodastream International Ltd (NASDAQ:SODA)’s largest market, accounting for nearly half of the company’s revenue.

However, Sodastream International Ltd (NASDAQ:SODA) has managed to post double-digit revenue growth in Europe through at least the first quarter of this year. Western Europe is still mired in an economic funk, but the value proposition of making carbonated beverages at home is resonating in SodaStream’s more-established overseas markets.

Against the flattish reports that The Coca-Cola Company (NYSE:KO) should report tomorrow and Coca-Cola Enterprises Inc (NYSE:CCE) will announce next week, Sodastream International Ltd (NASDAQ:SODA) is expected to hold up considerably well when it reports at the end of the month. Analysts see revenue and earnings per share climbing 26% and 27%, respectively.

Both Coca-Cola and SodaStream trade at 18 times next year’s earnings. Doesn’t your portfolio deserve the company that’s actually growing at a clip that justifies that kind of multiple?

SodaStream will bounce back. If it doesn’t happen in the next few days, Sodastream International Ltd (NASDAQ:SODA)’s report on July 31 should remind investors about the disruptor’s potential for growth in a flat industry.

The article SodaStream Should Bounce Back originally appeared on and is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz owns shares of SodaStream. The Motley Fool recommends Coca-Cola and SodaStream. The Motley Fool owns shares of SodaStream.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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