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On Thursday, Jefferies analyst Kaumil Gajrawala adjusted the price target for The Vita Coco Co. Inc (NASDAQ:COCO) to $42.00, a slight decrease from the previous $43.00. Despite the change, the firm continues to recommend a Buy rating for the stock. According to InvestingPro data, the stock has delivered an impressive 50% return over the past year, though it recently experienced a 10% decline in the past week. The adjustment follows the company’s fourth-quarter performance, which displayed robust sales and EBITDA figures that surpassed expectations, even in the face of supply chain challenges and increasing freight costs. InvestingPro data shows the company generated $516 million in revenue and $74.6 million in EBITDA over the last twelve months, maintaining a strong financial health score of 3.56 out of 5.
The initial financial guidance for fiscal year 2025 was somewhat conservative, reflecting the pressures of promotional line (PL) headwinds and higher freight expenses. However, Gajrawala emphasized the positive outlook for Vita Coco, noting that the company is on a strong footing with capacity and inventory levels returning to normal, a quickening pace of consumption, and a decline in freight rates.
While acknowledging the short-term obstacles that may cloud the company’s current progress, Gajrawala expressed confidence that these issues are temporary. The analyst’s commentary suggests a belief in the inherent strength and resilience of Vita Coco’s business model and market position.
The company’s solid fourth-quarter results, combined with the optimistic view of its future prospects, underpin Jefferies’ decision to maintain a Buy rating. The slight reduction in the price target to $42.00 reflects current market realities without detracting from the overall positive stance on the stock’s potential.
In other recent news, Vita Coco Company reported its fourth-quarter results, which exceeded analyst expectations. The company posted adjusted earnings per share of $0.11, surpassing the anticipated $0.07, while revenue for the quarter reached $127 million, beating the consensus estimate of $120.41 million. For the full year 2024, Vita Coco’s net sales increased by 5% to $516 million, with a notable 10% rise in Vita Coco Coconut Water sales. However, the company’s 2025 revenue guidance of $555 million to $570 million fell short of analyst expectations, with the midpoint of $562.5 million below the consensus of $569.4 million. Despite this, Vita Coco anticipates mid-teens growth in its coconut water segment for 2025. The company projects a gross margin between 35% and 37%, a decrease from the 39% reported in 2024. Vita Coco concluded 2024 with $165 million in cash and no debt, reflecting a strong financial position.
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