Company Overview
Zevia PBC functions as a developer and distributor of zero sugar beverages across the United States and Canada, offering a portfolio that includes soda, energy drinks, and organic tea under its primary brand name. The company operates within the Consumer Defensive sector, specifically in the Beverages - Non-Alcoholic industry, which typically denotes businesses selling essential goods that are less sensitive to economic downturns compared to discretionary spending sectors. As a micro-cap entity, Zevia holds a market capitalization of $76.15M and employs 91 individuals to support its distribution network across grocery, national, convenience, natural products, and warehouse club retailers. The market capitalization of $76.15M combined with annual revenue of $161.26M indicates that the company operates with significant revenue generation relative to its shareholder equity, suggesting a high operational turnover despite its small size.
Financial Health
The company reported revenue of $161.26M over the trailing twelve months, yet it recorded a net income of $-9,757,000 and an EBITDA of $-8,753,000. The substantial gap between the $161.26M in revenue and the $-9,757,000 in net income reveals a cost structure where operating expenses and other charges exceed gross profits, resulting in a bottom-line loss despite substantial sales volume. Despite the accounting losses, the company generated a free cash flow of $492,875, which provides a degree of financial flexibility by allowing the firm to fund operations and potentially invest in assets without relying solely on external financing. The gross margin stands at 48.0%, indicating strong pricing power or efficient production costs relative to the cost of goods sold, while the operating margin is -4.0% and the profit margin is -6.2%, highlighting that high operating expenses are consuming the gross profit generated. On the balance sheet, the company holds $25.35M in cash against a total debt obligation of $668,000, creating a liquidity buffer that is conservative relative to the liability side. This asset positioning is supported by a debt-to-equity ratio of 1.88, which suggests a leveraged balance sheet where equity is smaller than the debt load, yet the massive cash reserve mitigates immediate solvency risks. Furthermore, the current ratio is 2.08, indicating that the company possesses more than double the current assets required to cover its current liabilities, which points to robust short-term liquidity. The return on equity is -28.4% and the return on assets is -9.1%, metrics that reveal that management has not yet achieved profitability, as the company is currently destroying shareholder value and failing to generate returns on the capital deployed.
Valuation Assessment
The trailing twelve-month P/E ratio is listed as N/A due to the negative earnings, while the forward P/E is inf, implying that the market is pricing the stock based on future expectations of earnings rather than historical performance. The price-to-book ratio is 1.49, suggesting that the market is valuing the company at a 49% premium over its tangible book value, which could indicate optimism regarding future asset appreciation or intangible brand value. When looking at price-to-sales, the figure is 0.47, indicating the stock trades at less than half of its annual sales revenue, while the EV/EBITDA of -4.13 reflects the negative earnings multiple typically seen in high-growth or turnaround situations. The stock has traded between a 52-week high of $3.66 and a 52-week low of $1.11, providing a trading range of approximately $2.55 where the current price sits relative to this historical volatility. The beta value is 0.90, which indicates that the stock's price volatility is roughly in line with the broader market, moving neither significantly more nor less than the S&P 500 in response to market movements.
Growth & Income
Revenue growth year-over-year stands at -4.0%, while earnings growth is N/A given the negative earnings history, indicating that the company is currently shrinking in top-line sales and has not yet achieved profitable growth. Because the company does not pay a dividend, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, the firm reinvests its limited earnings and cash flow into growth initiatives rather than distributing income to shareholders. The absence of a dividend yield and the negative earnings growth rate suggest that the company is in a reinvestment phase where capital is being prioritized for expansion over income generation. The overall growth and income profile is characterized by negative revenue expansion and zero income distribution, reflecting a stage of development where profitability and top-line growth remain the primary strategic objectives.