Why The Vita Coco Company Stock Is Popping Today
Key Points
The Vita Coco Company continued to fire on all cylinders during the third quarter.
The better-for-you beverages company grew sales and earnings by 37% and 25% -- all while raising guidance.
Now eyeing international growth, Vita Coco aims to live up to a slightly lofty valuation.
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Shares of leading coconut beverages maker The Vita Coco Company (NASDAQ: COCO) are up 6% as of 2 p.m. ET on Wednesday, according to data provided by S&P Global Market Intelligence.
The better-for-you beverages upstart reported third-quarter earnings that rocketed past analysts' best guesses, and the stock moved higher.
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Vita Coco's sales grew by 37% and its earnings per share rose 25% during Q3. Management also raised the company's full-year sales guidance by 3% as well.
Vita Coco continues to dominate its fast-growing niche
Vita Coco holds around a 44% market share of the coconut water niche in the United States and continues to maintain its leadership advantage in the beverage industry's quickest-growing category.
Over the last 13 weeks, the coconut water category as a whole grew sales by 23% in the United States, outpacing the energy drink market's increase of 17%. Vita Coco, meanwhile, grew coconut water sales by 28%.
Image source: Getty Images.
These growth rates reinforce the notion that Americans are continuing to opt for better-for-you beverages like Vita Coco's offerings, giving the company a powerful long-term megatrend working in its favor.
Having grown sales by 13% annually over the last five years, Vita Coco continues to thrive as a stock, generating 33% annualized total returns since its IPO in 2021.
Best yet for investors, the company's nascent international operations are growing at an even faster clip, with coconut water sales rising by 43% in foreign markets.
Trading at 42 times earnings, Vita Coco isn't "cheap" by any means. However, its international expansion plans and a booming better-for-you food and beverage industry have the company in an excellent position to live up to a slightly premium valuation.
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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