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On Thursday, Piper Sandler maintained a Neutral rating on The Vita Coco Co. Inc (NASDAQ:COCO) with a set price target of $33.00. In response to a recent short report that led to an approximately 11% decline in Vita Coco’s share price - bringing its year-to-date return to -14.5% according to InvestingPro data - Piper Sandler addressed the concerns raised. Despite the recent volatility, the company maintains a "GREAT" financial health score of 3.52 out of 5. The short report had claimed that Vita Coco lost private label distribution, which appeared to be new information to the market.
Piper Sandler’s analyst engaged in discussions with Vita Coco and reported that the company’s situation remains consistent with previous statements. Vita Coco had already indicated the expectation of losing some regions with certain private label retailers during 2025. This anticipated change has been incorporated into the company’s outlook for 2025, which was reaffirmed today.
The analyst also noted Vita Coco’s strong supply chain, expressing skepticism that a competitor could match its scale in a cost-effective manner. Additionally, the analyst pointed out that since Vita Coco’s last report, sea freight rates have decreased, providing the company with cost advantages.
Despite the market’s reaction to the short report, Piper Sandler sees the recent pullback in Vita Coco’s shares as a potential buying opportunity. The firm suggests that there is approximately a 5% upside to its price target, which could materialize in the near term. With a P/E ratio of 34.3x and revenue growth of 4.5% in the last twelve months, investors seeking deeper insights can access comprehensive valuation metrics and 10 additional ProTips through InvestingPro’s detailed research report.
In other recent news, The Vita Coco Company reported fourth-quarter results that exceeded expectations, with adjusted earnings per share of $0.11, surpassing the analyst estimate of $0.07. Revenue for the quarter reached $127 million, beating the consensus estimate of $120.41 million and marking a 20% year-over-year increase. However, the company’s 2025 revenue guidance, projected between $555 million and $570 million, fell short of the analyst consensus midpoint of $569.4 million. Vita Coco also acknowledged inventory constraints and subpar service levels with private label retailers, anticipating potential contract losses with regional retailers in 2025.
Ningi Research announced a short position in Vita Coco, citing sluggish sales growth and a significant contract termination with Costco (NASDAQ:COST), which could lead to a $90 million revenue shortfall by the end of 2025. The research firm also highlighted Vita Coco’s declining market share and alleged mismanagement, including undisclosed related-party transactions and supply chain issues. Meanwhile, Jefferies adjusted its price target for Vita Coco to $42.00 from $43.00, maintaining a Buy rating based on robust sales and EBITDA figures that exceeded expectations. Jefferies noted that despite short-term challenges, Vita Coco’s capacity and inventory levels are stabilizing, with a positive outlook for the company’s future.
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