Value
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.6 |
| P/S | 6.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.5 |
| PEG | 9.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 32.3x
- ▸PEG: 0.53
COCO · Why this verdict
Why The Vita Coco Company (COCO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
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. | →Stable |
| 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. | →Stable |
| 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. | →Stable |
| 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.
→StableBear 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.
→StablePrice 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.
→StableQuality
- 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.
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.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.8 |
| ROA | 9.3 |
| Gross margin | 3.5 |
| Op margin | 7.5 |
| Net margin | 6.3 |
| Current ratio | 9.3 |
| FCF quality | 4.4 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 26%
- ▸Earnings quality warning: 56% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 37% YoY
Momentum
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.1 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 3.0 |
- ▸Oversold in uptrend (RSI 29)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.9 |
| erm sentiment | 5.0 |
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Heavy insider selling — $55,335,352 (1.464% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.7 |
| quality rank | 6.2 |
| growth rank | 8.5 |
- ▸Industry growth leader
Technical
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.6 |
| support resistance | 9.7 |
| 52w position | 5.4 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.0 |
| days to cover | 5.8 |
| volatility | 0.0 |
| put call | 8.9 |
| implied vol | 0.6 |
| beta | 8.4 |
| debt equity | 0.9 |
- ▸High IV: 76%
- ▸Concentration risks: 3 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.2<4.5
- ASYMMETRY:-0.1=NEGATIVE
- INSIDER:1.46%=EXTREME
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.10
Upside
-1.2%
Downside
12.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityAggressive — MCap $3.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 10.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.2<4.5, ASYMMETRY:-0.1=NEGATIVE, INSIDER:1.46%=EXTREME) reinforce the read. Current asymmetry R:R is -0.10 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 10.0, Technical at 8.2, and Catalyst at 7.5; the weakest are Insider at 3.0, Momentum at 3.2, and Risk (lower is worse) at 4.2. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.10 and an engine sizing output of AVOID.
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 Setup
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.