Vita Coco Stock Drops 8.8% After Zacks Downgrade Despite Blowout Q1 Earnings

Key Stats for Vita Coco Stock

• Price change for Vita Coco stock in last 5 days: -20%
• $COCO Share Price as of Jun. 30: $66
• 52-Week High: $86
• $COCO Stock Price Target: $75

Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>

What Happened?

Vita Coco (COCO) stock fell 20% in the last 5 days after Zacks Research downgraded shares from Strong Buy to Hold.

The downgrade landed after Vita Coco delivered one of the strongest quarters in its history.

• The company reported Q1 earnings per share of $0.50, beating the $0.34 estimate by nearly 50%.
• Revenue came in at $179.77 million, up 37.4% year-over-year and far above the $148.39 million Wall Street had expected.
• The company also raised its full-year guidance, now expecting net sales of $720 million to $735 million.

See analysts’ growth forecasts and price targets for Vita Coco stock (It’s free) >>>

What the Market Is Telling Us About Vita Coco Stock

The Zacks downgrade contrasts sharply with the broader analyst view on Vita Coco stock. Eight analysts currently have Buy ratings on the shares, while three have Hold ratings.

The consensus target is $70.43, implying upside from the current price. Wells Fargo recently raised its target to $85 with an Overweight rating. Jefferies lifted its target to $78 with a Buy. Goldman Sachs reiterated a Buy with a $71 target.

So why the drop? A few things are worth watching beyond the Zacks call.

Insider selling has been notable.

The company’s COO sold 30,000 shares in May at $75, reducing his position by over 34%. A director sold 74,232 shares in June at $80.29. In total, insiders sold more than 705,000 shares worth roughly $49 million over the past quarter.

All sales were conducted under pre-arranged trading plans, but the volume is a factor that investors typically take note of.

That said, institutional interest remains strong.

• Wasatch Advisors grew its stake by 80% in Q1, adding over 1.6 million shares.
• Wellington Management expanded its position by more than 232%.
• Institutional investors now own 88.49% of the company.

The underlying business momentum is hard to argue with.

• Coconut water grew 31% in U.S. retail dollars and 63% in key European markets in Q1.
• The company’s international segment grew revenue 72% in the quarter.
• Management described the category as transitioning from niche to mainstream.

Vita Coco stock trades at 48 times earnings and a PEG ratio of 1.74, which isn’t cheap. That’s likely what Zacks is flagging. But the business itself is accelerating, and most of Wall Street still sees room to run.

Estimate a company’s fair value instantly (Free with TIKR) >>>

How Much Upside Does Vita Coco Stock Have From Here?

With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.

All it takes is three simple inputs:

1. Revenue Growth
2. Operating Margins
3. Exit P/E Multiple

If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.

From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.

See a stock’s true value in under 60 seconds (Free with TIKR) >>>

Looking for New Opportunities?

• See what stocks billionaire investors are buying so you can follow the smart money.
• Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
• The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.

Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!