Cautious Outlook on Zevia PBC: Hold Rating Amid Growth Uncertainties

In a report released today, Dara Mohsenian from Morgan Stanley maintained a Hold rating on Zevia PBC (ZVIA – Research Report), with a price target of $2.50.

Dara Mohsenian has given his Hold rating due to a combination of factors influencing Zevia PBC’s current market position. The company showed a modest improvement in its first-quarter results, with a slight beat in net sales and a record gross margin as a public company. However, despite these positive indicators, there remains limited visibility on whether Zevia can fully leverage the growing trend towards healthier soda options.
Zevia’s performance at major retailers like Walmart has been promising, with positive consumer responses to their modern soda set. Yet, sales have still declined by 2% year-over-year, indicating challenges in capitalizing on distribution gains. While the company is well-positioned to benefit from broader retail trends and has made progress in efficiency initiatives, the uncertainties in sustaining growth and the reduction in price target reflect a cautious outlook, justifying the Hold rating.

In another report released on May 5, Telsey Advisory also maintained a Hold rating on the stock with a $3.00 price target.

Based on the recent corporate insider activity of 24 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ZVIA in relation to earlier this year.