On Thursday, Zevia PBC (NYSE:ZVIA) saw its price target reduced by Loop Capital from $4.00 to $2.00, though the firm kept a Buy rating on the stock. This adjustment follows Zevia's release of its first-quarter earnings, which showed an adjusted EPS of ($0.10), narrowly missing Loop Capital's projection of ($0.09) but aligning with the consensus.
Zevia's total net sales for the first quarter were reported at $38.8 million, marking a 10.4% year-over-year decline. This figure fell short of both Loop Capital's expectation of $39.8 million and the consensus estimate of $39.4 million. However, it did meet the company's prior guidance range of $38-40 million.
Despite the lower-than-anticipated sales, Loop Capital remains optimistic about Zevia's prospects. The firm's decision to maintain a Buy rating signifies continued confidence in the company's potential for growth. The reduced price target is now set based on 30 times Loop Capital's revised 2024 EV/EBITDA estimate for Zevia.
The adjustment by Loop Capital is a response to Zevia's recent financial performance and market conditions. The new price target of $2.00 represents a significant decrease from the previous target, reflecting a recalibration of expectations in light of the company's latest earnings report.
InvestingPro Insights
In the wake of Zevia's recent earnings report and Loop Capital's adjusted price target, it's important for investors to consider additional metrics and expert analysis. According to InvestingPro data, Zevia PBC currently holds a market cap of 61.87M USD and a negative P/E Ratio of -2.22, reflecting challenges in profitability. The company's revenue for the last twelve months as of Q1 2024 stands at 161.92M USD, with a notable gross profit margin of 44.7%. However, the company's revenue has seen a decline of 3.87% over the same period.
Looking at the InvestingPro Tips, it's clear that Zevia's financial position is a mix of strengths and concerns. On one hand, the company holds more cash than debt, and its liquid assets exceed short-term obligations, suggesting a degree of financial stability. On the other hand, Zevia is quickly burning through cash, and analysts do not anticipate the company will be profitable this year. Additionally, the stock has fared poorly over recent times, with significant price falls over the last month, three months, and year. Moreover, Zevia does not pay a dividend, which might be a consideration for income-focused investors.
Investors seeking a more comprehensive analysis can find additional insights with a total of 12 InvestingPro Tips available for Zevia, which can be accessed for further detailed analysis. For those interested in a deeper dive into Zevia's financials and future prospects, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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