Value
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.2 |
| P/S | 6.7 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.4 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 28.2x
- ▸PEG: 0.24
COCO · Why this verdict
Why The Vita Coco Company (COCO) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Strong execution and industry-leading growth are offset by the stock already trading above its resistance target with a negative risk/reward ratio, material product and geographic concentration, and a meaningful gap between reported earnings and cash generation — the setup does not support new exposure at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Coconut water accounts for 96% of revenue and the Americas segment generates 83% of sales, leaving the business highly exposed to a single-category disruption or regional demand softness with limited diversification to absorb it. Bear case | Non-coconut-water revenue exceeding 8% of total and a non-Americas segment exceeding 20% of sales would indicate meaningful diversification is underway. | ↓Deteriorating |
| CounterDominant share in a growing niche can confer scale advantages and brand loyalty that partly mitigate concentration risk; the perfect beat streak suggests the concentration has not yet impaired results. | ||
The stock is already trading above the resistance level that serves as the take-profit target, and the risk/reward ratio is negative at -0.26-to-1, meaning the current price offers no margin of safety and the asymmetry gate has failed. Price targets | A pullback below the take-profit level and a recovery to a reward-to-risk ratio above 1.5-to-1 would restore an actionable entry geometry. | Tripped↑Improving |
| CounterPositive price momentum — a rising OBV and the stock above its 200-day moving average — could sustain a breakout above resistance and open up higher price targets over time. | ||
Free cash flow converts at only 56 cents per dollar of reported net income, a level flagged as a quality warning, suggesting that a meaningful portion of reported profitability is tied up in non-cash items or working capital build. Quality | FCF-to-net-income conversion rising above 90% for 2 consecutive quarters would indicate that earnings quality has improved and reported profits are translating reliably into cash. | ↑Improving |
| CounterReturn on equity of 26% and a Piotroski F-Score of 7 out of 9 demonstrate genuine profitability; the FCF gap may reflect a growth-investment cycle rather than a structural earnings quality issue. | ||
The company has beaten analyst estimates in every quarter over the past year with an average upside surprise of nearly 30% and holds the top growth ranking in its industry peer group, including reported revenue growth of 37% year over year. Earnings | Revenue growth stays above 20% year over year and the EPS surprise average remains above 10% over the next four quarters. | →Stable |
| CounterA forward price-to-earnings multiple of 40.5 times means the market has already priced in continued outperformance; any moderation in growth or narrowing surprise margin could lead to a swift derating. | ||
Coconut water accounts for 96% of revenue and the Americas segment generates 83% of sales, leaving the business highly exposed to a single-category disruption or regional demand softness with limited diversification to absorb it.
↓DeterioratingBear case
- Expectation
- Non-coconut-water revenue exceeding 8% of total and a non-Americas segment exceeding 20% of sales would indicate meaningful diversification is underway.
CounterDominant share in a growing niche can confer scale advantages and brand loyalty that partly mitigate concentration risk; the perfect beat streak suggests the concentration has not yet impaired results.
The stock is already trading above the resistance level that serves as the take-profit target, and the risk/reward ratio is negative at -0.26-to-1, meaning the current price offers no margin of safety and the asymmetry gate has failed.
Tripped↑ImprovingPrice targets
- Expectation
- A pullback below the take-profit level and a recovery to a reward-to-risk ratio above 1.5-to-1 would restore an actionable entry geometry.
CounterPositive price momentum — a rising OBV and the stock above its 200-day moving average — could sustain a breakout above resistance and open up higher price targets over time.
Free cash flow converts at only 56 cents per dollar of reported net income, a level flagged as a quality warning, suggesting that a meaningful portion of reported profitability is tied up in non-cash items or working capital build.
↑ImprovingQuality
- Expectation
- FCF-to-net-income conversion rising above 90% for 2 consecutive quarters would indicate that earnings quality has improved and reported profits are translating reliably into cash.
CounterReturn on equity of 26% and a Piotroski F-Score of 7 out of 9 demonstrate genuine profitability; the FCF gap may reflect a growth-investment cycle rather than a structural earnings quality issue.
The company has beaten analyst estimates in every quarter over the past year with an average upside surprise of nearly 30% and holds the top growth ranking in its industry peer group, including reported revenue growth of 37% year over year.
→StableEarnings
- Expectation
- Revenue growth stays above 20% year over year and the EPS surprise average remains above 10% over the next four quarters.
CounterA forward price-to-earnings multiple of 40.5 times means the market has already priced in continued outperformance; any moderation in growth or narrowing surprise margin could lead to a swift derating.
Per-dimension breakdown
Quality
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 4.2 |
| Op margin | 10.0 |
| Net margin | 7.8 |
| Current ratio | 9.6 |
| FCF quality | 6.8 |
| Moat | 8.2 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 31%
- ▸Strong margins: 16%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
9.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 9.5 |
| EPS growth | 10.0 |
- ▸Strong growth: 28% YoY
Momentum
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 4.7 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.8 |
| Analyst rating | 6.9 |
| Price target | 8.0 |
- ▸LLM news sentiment: +0.36 (n=5)
- ▸Light analyst coverage (9.0) — signal dampened
- ▸Analyst upside: 23%
Insider
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $46,140,204 (1.225% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.2 |
| quality rank | 6.5 |
| growth rank | 8.5 |
- ▸Industry growth leader
- ▸Conservative debt levels
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.6 |
| support resistance | 9.5 |
| 52w position | 5.4 |
| gap | 5.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.1 |
| days to cover | 6.3 |
| volatility | 0.0 |
| put call | 8.9 |
| implied vol | 2.6 |
| beta | 8.4 |
| debt equity | 9.9 |
| news risk | 3.0 |
- ▸High IV: 65%
- ▸Concentration risks: 3 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.24, quality 8.5/10, growth 9.8/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAITPassed (4)
- NEWS_BOOST:ANALYST:0.60
- EARNINGS_PROXIMITY:94d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.0<4.5
- ASYMMETRY:0.6<1.5@spot
- INSIDER:1.23%=EXTREME
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.58
Upside
+7.3%
Downside
12.4%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (8.5) with weak momentum (3.0)
SuitabilityAggressive — MCap $3.8B<$5B
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 8.5 and growth 9.8 both clear their thresholds, with asymmetric R:R of 0.58 supporting the read.
The strongest dimensions are Growth at 9.8, Quality at 8.5, and Catalyst at 7.6; the weakest are Momentum at 3.0, Insider at 5.2, and Risk (lower is worse) at 5.4. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.58 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak Growth Leader
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Product Geographic Concentration
Trip ifNon-coconut-water revenue exceeds 15% of total revenue for 2 consecutive quarters, indicating material product diversification.
- P3Above Resistance Unfavorable SetupTripped
Trip ifPrice pulls back more than 15% from $82.85, bringing the reward-to-risk ratio above 1.5-to-1.
- P4Fcf Earnings Conversion Gap
Trip ifFCF-to-net-income conversion rises above 90% for 2 consecutive quarters.