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The Vita Coco Company, Inc. COCO is slated to report second-quarter 2024 results on Jul 31, before market open. The company is likely to report top and bottom-line growth when it posts the quarterly results.

The Zacks Consensus Estimate for the company’s earnings is pegged at 31 cents per share, which indicates an increase of 19.2% from the year-ago quarter’s reported figure. The consensus mark has remained stable in the past 30 days.

For second-quarter revenues, the consensus mark is pegged at $143.5 million, indicating a 2.7% rise from the year-ago quarter’s reported figure.

In the last reported quarter, the company delivered an earnings surprise of 26.3%. It delivered a trailing four-quarter average earnings surprise of 25.3%.

Key Factors to Note

Vita Coco Company’s quarterly performance is expected to have benefited from its strength in brands and the solid execution of its strategic efforts. Its consistent focus on driving growth in the coconut water category and expanding its share in the category appears encouraging. Its flagship brand has been performing well for a while. Apart from experiencing solid branded retail growth, the company has been witnessing higher private label coconut water volumes. 

In addition, Vita Coco Company’s commercial initiatives related to the Vita Coco multi-packs, Vita Coco Farmers Organic and Vita Coco Juice are likely to have contributed to its performance. The company’s focus on expanding consumption occasions of coconut water is likely to have driven the category’s and the flagship Vita Coco Coconut Water brand’s performance. All the aforementioned strengths, coupled with its focus on growing the core business and a solid international business, are likely to have bolstered the bottom and top-line performance.

On the flip side, a tough macroeconomic landscape, including uncertainty related to the operating environment, global economies and geopolitical issues, is a concern. The company has been witnessing higher SG&A expenses for a while. Management, in its last earnings call, cited that the elevated certain ocean freight routes are anticipated to hurt the gross margin starting the second quarter and the impact is likely to have been severe in the impending quarter.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Vita Coco Company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Vita Coco Company, Inc. Price and EPS Surprise

Vita Coco Company, Inc. price-eps-surprise | Vita Coco Company, Inc. Quote

Vita Coco Company currently has an Earnings ESP of -3.85% and a Zacks Rank of 3.

Stocks With the Favorable Combination

Here are some companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Coty COTY has an Earnings ESP of +22.73% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly earnings has remained unchanged in the past 30 days at 5 cents per share. The consensus mark for earnings indicates a 400% surge from the figure reported in the year-ago quarter. 

The consensus estimate for quarterly revenues is pegged at $1.38 billion, which indicates a rise of 1.9% from the figure reported in the year-ago quarter. COTY delivered a trailing four-quarter average negative earnings surprise of 22.2%.

Clorox CLX currently has an Earnings ESP of +1.51% and a Zacks Rank of 3. The company is likely to register a top and bottom-line decline when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Clorox’s quarterly revenues is pegged at $1.97 billion, indicating a decline of 2.3% from the figure reported in the prior-year quarter. The consensus mark for earnings has risen a penny in the past seven days.

The consensus estimate for Clorox’s quarterly earnings of $1.54 per share implies a decline of 7.8% from the year-ago quarter’s levels. However, Clorox has a trailing four-quarter earnings surprise of 128.5%, on average.

Colgate CL currently has an Earnings ESP of +0.33% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports second-quarter numbers. The Zacks Consensus Estimate for CL’s quarterly revenues is pegged at $5 billion, which indicates growth of 4% from the prior-year quarter’s reported figure.

The consensus estimate for quarterly earnings has remained unchanged in the past 30 days at 87 cents per share. The estimate indicates 13% growth from the year-ago reported quarter. CL delivered a trailing four-quarter average earnings surprise of 4.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Keurig Dr Pepper, Inc came out with quarterly earnings of $0.45 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this company would post earnings of $0.34 per share when it actually produced earnings of $0.38, delivering a surprise of 11.76%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Keurig Dr Pepper, which belongs to the Zacks Beverages - Soft drinks industry, posted revenues of $3.92 billion for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.54%. This compares to year-ago revenues of $3.79 billion. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Keurig Dr Pepper shares have lost about 1.7% since the beginning of the year versus the S&P 500's gain of 13.8%.

What's Next for Keurig Dr Pepper?

While Keurig Dr Pepper has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Keurig Dr Pepper: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.52 on $3.95 billion in revenues for the coming quarter and $1.92 on $15.37 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Beverages - Soft drinks is currently in the bottom 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Vita Coco Company, Inc. , is yet to report results for the quarter ended June 2024. The results are expected to be released on July 31.

This company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +19.2%. The consensus EPS estimate for the quarter has been revised 1.5% lower over the last 30 days to the current level.

Vita Coco Company, Inc.'s revenues are expected to be $143.47 million, up 2.7% from the year-ago quarter.

Zacks Investment Research

The market expects Vita Coco Company, Inc. to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 31. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus Estimate

This company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +19.2%.

Revenues are expected to be $143.47 million, up 2.7% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 1.49% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Earnings Whisper

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Vita Coco Company?

For Vita Coco Company, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -3.85%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Vita Coco Company will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Vita Coco Company would post earnings of $0.19 per share when it actually produced earnings of $0.24, delivering a surprise of +26.32%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Vita Coco Company doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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