Reed's (REED) AI Stock Analysis

• Market Cap: $24.61M
• Dividend Yield: N/A
• Average Volume (3M): 61.64K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.01
• Revenue Growth: -9.01%
• EPS Growth: 86.75%
• Country: US
• Employees: 24
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): -0.48
• Shares Outstanding: 11,445,454
• 10 Day Avg. Volume: 115,434
• 30 Day Avg. Volume: 61,642
• PEG Ratio: 0.04
• Price to Book (P/B): 4.54
• Price to Sales (P/S): 0.79
• P/FCF Ratio: -4.80
• Enterprise Value/Market Cap: 11.63
• Enterprise Value/Revenue: 7.94
• Enterprise Value/Gross Profit: 34.30
• Enterprise Value/Ebitda: -23.45
• 1Y Price Target: $4.75
• Price Target Upside: ― Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): -0.78
• Revenue Forecast (FY): $42.82M

• Rating: 41 Neutral
• Price Target: $2.00

The score is held down primarily by weak financial performance (losses, negative cash flow, and high leverage) and a strong bearish technical trend (price far below key moving averages with negative MACD). Partially offsetting this are a mixed-but-improving operational narrative from the earnings call (sales growth and cost actions) and a positive COO appointment, though neither yet changes the underlying profitability and cash-burn profile.

Positive Factors

Distribution & Sales Growth

Expanding national retail distribution and a 4% sales lift indicate durable channel penetration and greater shelf visibility. Winning Costco and Walgreens tests supports sustained volume growth, improves bargaining power with retailers, and reduces reliance on any single account over the medium term.

Operational Cost Reductions

A 14% reduction in delivery and handling costs reflects tangible supply-chain and logistics gains that can persist beyond a single quarter. Combined with stated packaging and portfolio changes, these efficiency improvements can structurally raise gross margins and improve unit economics if executed consistently.

Experienced Operations Leadership

Hiring a returning executive with deep commercial and operational experience can materially improve execution on distribution, merchandising and cost control. The targeted equity and performance incentives align management with medium-term profitability and distribution expansion objectives.

Negative Factors

Declining Revenue & Negative Margins

Persistent revenue decline and deep negative margins threaten long-term viability without structural fixes. Negative operating margins limit reinvestment capacity, require ongoing external funding or cost restructuring, and indicate the core product economics currently do not support sustainable profitability.

High Leverage

Significant leverage reduces financial flexibility and increases refinancing and interest burden risk, constraining the company's ability to fund strategic initiatives. In an industry with thin margins, high debt amplifies vulnerability to revenue shocks and limits options for investment or marketing support.

Negative Operating Cash Flow

Ongoing operating cash outflows and reliance on external financing or asset draws undermine sustainability. Even with some free-cash-flow improvement, persistent cash burn forces tough trade-offs between growth and liquidity, raising risk of equity dilution, debt stress, or reduced ability to execute on distribution plans.

Reed's Business Overview & Revenue Model

Company Description

Reed's Inc. (REEDD) is a leading company in the beverage sector, primarily known for its line of handcrafted ginger ales and other naturally flavored beverages. The company focuses on producing high-quality, non-alcoholic drinks that cater to health-conscious consumers. Reed's operates in the specialty food and beverage market, offering products that emphasize natural ingredients and health benefits, including ginger-based drinks that are popular for their digestive and anti-inflammatory properties.

How the Company Makes Money

Reed's generates revenue through the sale of its beverage products, which include ginger ales, kombucha, and other specialty drinks. The company primarily sells its products through retail channels, including grocery stores, health food stores, and online platforms. Key revenue streams include direct sales to consumers, wholesale distribution to retailers, and partnerships with food service providers. Additionally, Reed's benefits from brand recognition and loyalty, which drives repeat purchases. Strategic partnerships with distributors and retailers expand their market reach and enhance sales opportunities, contributing significantly to the company's overall earnings.

Reed's Financial Statement Overview

Summary

Reed's financial performance is weak, with declining revenues, negative profit margins, high leverage, and negative cash flows. The company faces significant financial challenges and needs strategic improvements to enhance operational efficiency, reduce debt, and stabilize cash flows.

Income Statement

Reed's income statement shows significant challenges with declining revenue and negative profit margins. The TTM data indicates a revenue decrease of 6.12% and a net profit margin of -35.19%, reflecting ongoing struggles to achieve profitability. The gross profit margin is relatively low at 29.61%, and both EBIT and EBITDA margins are negative, indicating operational inefficiencies. Overall, the company faces substantial hurdles in improving its financial performance.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.25, indicating significant leverage and potential financial risk. The return on equity is positive at 156.68%, but this is due to the low equity base rather than strong performance. The equity ratio is weak, suggesting limited financial stability. Reed's needs to address its high leverage to improve its financial health.

Cash Flow

Reed's cash flow statement highlights negative operating and free cash flows, with a slight improvement in free cash flow growth at 44.52%. However, the operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is slightly above 1, suggesting some ability to cover net losses with free cash flow, but overall cash flow remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	36.04M	37.95M	44.71M	53.04M	49.60M	41.62M
Gross Profit	8.34M	11.38M	9.71M	12.11M	13.60M	12.77M
EBITDA	-12.20M	-7.38M	-9.28M	-14.73M	-14.96M	-8.67M
Net Income	-16.35M	-13.15M	-15.52M	-19.11M	-17.60M	-11.48M
Balance Sheet
Total Assets	23.70M	25.14M	18.88M	25.49M	26.32M	20.06M
Cash, Cash Equivalents and Short-Term Investments	2.68M	10.39M	603.00K	533.00K	49.00K	595.00K
Total Debt	10.60M	10.41M	27.58M	21.89M	10.78M	1.46M
Total Liabilities	21.97M	18.49M	38.06M	33.96M	22.12M	9.65M
Stockholders Equity	1.74M	6.65M	-19.18M	-8.47M	4.20M	10.40M
Cash Flow
Free Cash Flow	-13.46M	-6.28M	-4.35M	-15.44M	-17.92M	-9.66M
Operating Cash Flow	-13.23M	-6.12M	-4.27M	-15.43M	-17.59M	-9.50M
Investing Cash Flow	-234.00K	-167.00K	-20.00K	-2.00K	-335.00K	-161.00K
Financing Cash Flow	15.81M	16.08M	4.36M	15.92M	17.38M	9.34M

Reed's Technical Analysis

• Last Price: ―

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REED, the sentiment is undefined. The current price of undefined is equal to the 20-day moving average (MA) of ―, equal to the 50-day MA of ―, and equal to the 200-day MA of ―, indicating a neutral trend. The MACD of ― indicates undefined momentum. The RSI at ― is undefined, neither overbought nor oversold. The STOCH value of ― is undefined, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a undefined sentiment for REED.

Reed's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Reed's Corporate Events

Reed’s Appoints Neal Cohane as New Chief Operating Officer

On December 29, 2025, Reed’s, Inc. announced it had appointed industry veteran Neal Cohane as Chief Operating Officer, effective January 5, 2026, marking his return to the company after more than 15 years as its Chief Sales Officer through 2022 and subsequent roles at Eastroc Beverages and his own consultancy, Rootstock Brands. Cohane’s compensation package includes a $320,000 annual base salary, eligibility for a performance-based bonus of up to 80% of base pay, a monthly stipend that includes a car allowance, and a targeted annual equity incentive award valued at $500,000, underscoring Reed’s strategic bet that his deep operational and commercial experience will strengthen sales, marketing and operations, expand distribution channels, and support the company’s next phase of growth and value creation for shareholders.

The most recent analyst rating on (REED) stock is a Buy with a $4.75 price target. To see the full list of analyst forecasts on Reed’s stock, see the REED Stock Forecast page.

Reed’s Executes 1-for-6 Reverse Stock Split

On October 31, 2025, Reed’s, Inc. executed a 1-for-6 reverse stock split of its common stock, as authorized by its major shareholder, D&D Source of Life Holding Ltd., which holds approximately 52.8% of the company’s voting capital stock. This corporate action, effective at 5:00 p.m. Eastern Time, resulted in approximately 8,945,620 shares of common stock being issued and outstanding, and the company’s stock will begin trading on a split-adjusted basis on the OTCQX Best Market on November 3, 2025.

The most recent analyst rating on (REED) stock is a Hold with a $1.00 price target. To see the full list of analyst forecasts on Reed’s stock, see the REED Stock Forecast page.