Shares of Zevia PBC (ZVIA) plunged 11.3% on November 12, after the Los Angeles-based soft drink and beverages company known for using the natural sugar substitute stevia, reported mixed Q3 results.
Shares of the company with the current market capitalization of $650 million have lost 27% since its IPO in July this year.
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Mixed Quarterly Numbers
The company reported an adjusted loss of $0.75 per share, falling 17 cents short of the Street’s estimated loss of $0.58 per share.
However, net sales jumped 22% year-over-year to $39 million. The revenues growth reflects a surge in unit volumes by 26% to $3.5 million, which offset a 4% decline in average price per case. (See Zevia PBC stock charts on TipRanks)
However, gross margin declined 300 bps to 44% from 47% in same quarter last year due to higher trade promotions.
Management Weighs In
Zevia CEO, Paddy Spence, commented, “We continue scaling our business aggressively to meet the growing demand for Zevia products and mitigation efforts are helping address cost pressures broadly affecting our industry.”
He further added, “We believe our growth algorithm is firmly on track and we are making significant progress on ESG initiatives aimed at improving global public health by reducing sugar intake as well as replacing single-use plastics with sustainable alternatives.”
Wall Street’s Take
Consensus among analysts is a Strong Buy based on 6 Buys and 2 Holds. The average Zevia PBC price target of $18.31 implies 82.73% upside potential to current levels.
According to TipRanks data, financial blogger opinions are 100% Bullish on ZVIA against a sector average of 69%.
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