PepsiCo, Inc. (NASDAQ
EP) is a global food and beverage leader known for its diverse product portfolio, including brands like Pepsi, Mountain Dew, Lay's, and Quaker. The company competes with other giants like Coca-Cola and Nestlé. On February 4, 2025, PepsiCo reported earnings per share (EPS) of $1.96, slightly above the estimated $1.95, indicating a positive earnings performance.
The reported EPS of $1.96 not only surpassed the Zacks Consensus Estimate but also showed growth from the previous year's $1.78 per share. This growth highlights PepsiCo's ability to enhance its profitability over the past year, despite facing challenges in its key North American market. However, the company's revenue of $27.78 billion fell short of the estimated $27.89 billion, as highlighted by CNBC.
The shortfall in revenue is attributed to a decline in demand for PepsiCo's snacks and drinks in North America, its largest market. This decline poses a challenge for the company, as it navigates changing consumer preferences. As reported by Reuters, PepsiCo has projected its annual profit to fall below market expectations due to this weak demand.
PepsiCo's financial metrics provide further insight into its market valuation and financial health. With a price-to-earnings (P/E) ratio of 21.10, the market values its earnings relatively high. The price-to-sales ratio of 2.15 and enterprise value to sales ratio of 2.56 reflect the value investors place on its revenue and total worth. The company's debt-to-equity ratio of 2.31 indicates significant financial leverage, while a current ratio of 0.89 suggests a tight short-term liquidity position.
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