SodaStream has named Scarlett Johansson as its first celebrity ambassador but will that be enough to get SodaStream pop up again soon?
fell in love with everything else about her. Now 28 year-old Hollywood superstar Scarlett Johansson is being cast in Super Bowl ads for SodaStream.Her voice made Joaquin Phoenix's character fall in love with her in the movie "Her" and Esquire magazine
The home soda maker is hoping that Johansson, as their first-ever "celebrity ambassador", will drive up sales significantly. That's something they very much need at the moment. On Monday, the company lowered its fiscal 2013 guidance after holiday sales came in lower than expected. That's sent shares down 25% shortly after the announcement.
Share drops weren't always case for SodaStream. In the first six months of 2013, the stock had even more fans than, well, Scarlett Johansson and gained nearly 62%. The second half saw a 32% decline and SodaStream closed the year up 9.5% compared to 29% for the S&P 500 index.
According to Andrew Busch, editor and publisher of The Busch Update, the recent lower guidance was part of a long string of disappointments from SodaStream.
"The last two quarters, they've missed on earnings," says Busch. "That's the problem… In October, they said adjusted net income was going to be $65 million. It came in [Monday] at $52.5 million. That's a 20% miss and that's why the stock's down 20% and down about 50% from the highs back in May."
Despite being a fan of the company's product, Busch isn't so enthusiastic about the company's health.
"Until they can go back and reestablish some confidence with the markets about what they're predicting for their sales," says Busch, "they're going to have trouble."
Carter Worth, Chief Technical Strategist at Oppenheimer & Co., is even blunter with how he views SodaStream's stock.
"This is an unmitigated disaster," says Worth, who views SodaStream's drop as an opportunity to examine one common trading strategy.
"It's a testament to not buying weakness," says Worth. "The relative strength matters. The relative strength (for SodaStream) has been poor."
Worth sees the stock as having made a double top, first in June 2011 and again a year later. That leads Worth to his target on the stock.
"This thing's going to $30 from what we can see," says Worth.
To see the rest of Busch and Worth on SodaStream, watch the video above.
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