Keurig Dr Pepper Inc. Fundamental Analysis (NASDAQ: KDP)
Keurig Dr Pepper Inc. Fundamental Analysis (NASDAQ: KDP)
Keurig Dr Pepper Inc. (NASDAQ: KDP) shows weak financial fundamentals with a PE ratio of 31.16, profit margin of 7.10%, and ROE of 5.64%. The company generates $20.1B in annual revenue with moderate year-over-year growth of 8.16%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 30.0/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze KDP's fundamental strength across five key dimensions:
Efficiency Score
WeakKDP struggles to generate sufficient returns from assets.
Valuation Score
ModerateKDP shows balanced valuation metrics.
Growth Score
ExcellentKDP delivers strong and consistent growth momentum.
Financial Health Score
WeakKDP carries high financial risk with limited liquidity.
Profitability Score
WeakKDP struggles to sustain strong margins.
Key Financial Metrics
Is KDP Expensive or Cheap?
P/E Ratio
KDP trades at 31.16 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, KDP's PEG of -2.68 indicates potential undervaluation.
Price to Book
The market values Keurig Dr Pepper Inc. at 1.68 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 2.55 times EBITDA. This is generally considered low.
How Well Does KDP Make Money?
Net Profit Margin
For every $100 in sales, Keurig Dr Pepper Inc. keeps $7.10 as profit after all expenses.
Operating Margin
Core operations generate 16.82 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $5.64 in profit for every $100 of shareholder equity.
ROA
Keurig Dr Pepper Inc. generates $1.63 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Keurig Dr Pepper Inc. produces operating cash flow of $2.53B, showing steady but balanced cash generation.
Free Cash Flow
Keurig Dr Pepper Inc. produces free cash flow of $1.97B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.45 in free cash annually.
FCF Yield
KDP converts 4.68% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
31.16
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.68
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.68
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.10
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.37
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.48
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How KDP Stacks Against Its Sector Peers
| Metric | KDP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 31.16 | 20.51 | Worse (Expensive) |
| ROE | 5.64% | 695.00% | Weak |
| Net Margin | 7.10% | -2241.00% (disorted) | Weak |
| Debt/Equity | 1.37 | 0.80 | Weak (High Leverage) |
| Current Ratio | 0.48 | 2.37 | Weak Liquidity |
| ROA | 1.63% | 320.00% | Weak |
KDP outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Keurig Dr Pepper Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
48.07%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
62.58%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
-16.00%
Industry Style: Defensive, Dividend, Low Volatility
Declining