On Thursday, Telsey Advisory Group revised its share price target for Zevia PBC (NYSE:ZVIA), reducing it to $2.00 from the previous $3.00, while keeping a Market Perform rating on the stock.
The adjustment followed Zevia's first-quarter 2024 performance, which presented a sales decline in line with expectations but an adjusted EBITDA that fell short of forecasts.
Zevia's reported sales for the first quarter dropped by 10%, aligning with projections. However, the company's adjusted EBITDA was a loss of $5.5 million, which was more severe than Telsey's anticipated loss of $3.8 million and the FactSet consensus estimate of a $2.9 million loss.
The company's financials reflect ongoing challenges, including a slower recovery in regaining shelf space after previous supply chain disruptions.
The beverage company also provided a forecast for the second quarter and full year of 2024 that was less optimistic than market expectations.
Zevia's guidance for second-quarter sales is a decrease of 10% to 5% year-over-year, aiming for a range between $38 million to $40 million. This is notably below the FactSet consensus, which anticipated a 10% increase to $46 million.
For the full year of 2024, Zevia expects sales to range from a 5% decline to flat growth year-over-year, projecting revenues between $158 million and $166 million. This guidance stands in contrast to the more positive 5.1% growth to $175 million predicted by FactSet.
The company's outlook is further dampened by continued investments, which are exerting pressure on profits. As Zevia navigates its efforts to recover and grow amidst these investments and market challenges, its financial trajectory remains under close scrutiny.
InvestingPro Insights
In light of Telsey Advisory Group's revised price target for Zevia PBC (NYSE:ZVIA), it's pertinent to consider additional insights. According to InvestingPro, Zevia holds more cash than debt on its balance sheet, which can be a positive sign for investors looking at the company's financial stability. However, with the company quickly burning through cash and analysts not anticipating profitability this year, the financial outlook remains challenging. The stock's performance has also been underwhelming, with a significant price drop over the last year, including a 74.53% decline in the one-year price total return as of the first quarter of 2024.
InvestingPro Data reveals a market capitalization of $61.87 million and a negative P/E Ratio of -2.57, reflecting the company's current lack of earnings. The revenue has seen a decline of 3.87% over the last twelve months as of Q1 2024, which aligns with the sales decrease reported in Zevia's first-quarter performance. Additionally, the adjusted price to book value stands at 0.77, suggesting that the stock may be undervalued relative to its assets.
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