"SodaStream International Ltd (SODA), based out of Israel, develops, manufactures, and markets its home beverage carbonation systems that allow consumers to instantly convert tap water into carbonated soft drinks and sparkling waters. For a small company that went public in November of 2010, its product appears to be catching on with the global consumer as it has posted double-digit sales gains for 13 straight quarters. The company is selling more than 10,000 soda machines a day and can be found in more than 60,000 stores in 45 countries, and appears to be growing as the company plans expansion in 2013 into India, Mexico, China, and Greece. There are solid reasons for the success of SodaStream, and the most important is the cost. The consumer can save a lot of money by using SodaStream: The exchangeable carbon dioxide canisters cost $15.00 and make the equivalent of 170- 12oz cans of soda; add in the syrup and the total cost is about $0.25 per glass. Another reason for the success of SodaStream is that the syrups have 66% less sugar, sodium, and calories than a typical carbonated beverage, and there's little waste since the bottles are reusable. In March 2012 SodaStream introduced 12 new lower calorie syrup flavors including pink grapefruit, peach-pear, orange, lemon-lime, cranberry-apple, all sweetened with stevia. According to Daniel Birnbaum, SodaStream's CEO, "Diet flavors sweetened naturally with stevia are another key milestone in our commitment to provide healthier alternatives to pre-packaged carbonated drinks. Consumers can now make a smarter beverage choice, not only for the environment and their wallet, but also for the wellness of their family. We remain committed to continue empowering consumers with better, more innovative products."
SodaStream, with a market cap of $878.41 million, has had an excellent run-up of 33% YTD. In February the stock hit a high of $48.13 shortly after announcing its partnership with Kraft Foods (KRFT) to add Crystal Light and Country Time Lemonade to its SodaStream line; and in July it announced the addition of Kraft's Kool-Aid brand as well. In November the company announced it entered into a licensing agreement with the Campbell Soup Company (CPB) to add V8 Splash and V8 V-Fusion brands for the SodaStream line. According to I/B/E/S Estimates, analysts are expecting the company to report revenue of $415 million and net income of $48 million for fiscal 2012, an increase of roughly 46% over 2011, which saw revenue of $289.0 million. Currently Zacks has a neutral rating on SodaStream, but it added that the company has bright prospects going forward: "Solid demand, expanding strategic partnerships like with Kraft Foods Group, Inc., enhanced marketing activities, regular product innovations, accretive acquisitions and successful strategic investments will drive the stock going forward." Zacks also added that the analysts could not rule out an upgrade in the near term. I agree with Zacks assessment and I see SodaStream as more than a novelty or fad that will eventually end up buried in the cupboard. I think SodaStream, like its new stevia based syrups, is here to stay and I think the stock has good potential to continue to grow."