Oatly Vs. Pepsi: Which Beverage Stock Is A Better Buy?

Past and Expected Financial Performance

PEP’s revenue has grown 10.2% over the past year. Analysts expect its  revenue to increase 9.2% year-over-year in the current year and 4.4% next year. Its EPS is expected to increase 12.7% in the current year and 7.6% next year. The stock’s EPS is expected to grow at 9% rate per annum over the next five years.

In comparison, OTLY’s revenue has increased 106.5% over the past year. Analysts expect OTLY’s revenue to increase 61.9% year-over-year in the current year and 83% next year. Its EPS is expected to remain negative  in the current year and next year. However, analysts expect the stock’s EPS to grow at 14.9% rate per annum over the next five years.

Profitability

PEP’s trailing-12-month revenue is 156.3 times OTLY’s. PEP is also more profitable with a 54.3% gross profit margin versus OTLY’s 30.2%.

Also, PEP’s EBITDA margin and ROE values of 18.4% and 59%, respectively, compare favorably with OTLY’s negative values.

Valuation

In terms of non-GAAP forward P/E, PEP is currently trading at 24.96x, compared to OTLY’s negative 58.15x. OTLY’s 18.17x forward EV/Sales is 457.4% higher than PEP’s 3.26x.

Also, in terms of trailing-12-month Price/Sales, PEP’s 19.02x is 562.7% higher than PEP’s 2.87x.

POWR Ratings

While OTLY has an overall D grade, which translates to Sell in our proprietary POWR Ratings system, PEP has an overall B grade, which equates to Buy. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

In terms of Quality, PEP has been graded a B, which is in sync with its higher-than-industry profitability ratios. PEP’s 54.3% trailing-12-month gross profit margin is 52.6% higher than the 35.6% industry average. In comparison, OTLY’s D grade for Quality reflects its lower-than-industry profit margins. OTLY has a 30.2% trailing-12-month gross profit margin, which is 15.3% lower than the 35.6% industry average.

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