Can Keurig Script a Turnaround with Keurig 2.0 and KOLD? - Analyst Blog
Keurig Green Mountain Inc. GMCR has been in troubled waters for some time. Recently, its shares hit a 52-week low following the dismal second-quarter results. Investors have turned a cold shoulder after the company reported lower-than-expected results in two consecutive quarters.
Moreover, Keurig Green Mountain’s much-hyped Keurig 2.0 brewer launched in Sep 2014 was not received well by consumers, especially because of the high price tag. Also, the unlicensed pods that consumers have been using for so long are not compatible with this brewer. Keurig 2.0 uses an interactive readability ‘lock-out technology’ that works only with licensed K-Cup pods.
Things have not being going well for the Keurig K-cup maker of late. After the Keurig 2.0 brewer failed to live up to the expectations, Keurig Kold brewer, initially launched at a presentation on May 14, could not gain investors’ approval.
Reportedly, analysts expressed concerns that the high-priced brewer might not gain popularity among consumers. The brewers are expected to be available for sale online in fall 2015 and at retail shops by the holiday season of 2016.
However, management seems optimistic about the future of Keurig 2.0 brewer and is confident that once consumers know more about the variety of brands that can be brewed on the machine, product sales will pick up.
Moreover, Keurig Green Mountain is reportedly reintroducing My K-Cup coffee brewing pods that allows brewing of non-Keurig coffee. This is expected to provide more flexibility to the Keurig 2.0 brewers and thus restore its popularity.
Keurig Green Mountain currently carries a Zacks Rank #4 (Sell). Some better-ranked companies in the consumer staples sector are Pilgrim's Pride Corporation PPC, The WhiteWave Foods Company WWAV and True Drinks Holdings, Inc. TRUU. All these stocks carry a Zacks Rank #2 (Buy).
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KEURIG GREEN MT (GMCR): Free Stock Analysis Report
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