PepsiCo, Inc.
PepsiCo, Inc. Fundamental Analysis
PepsiCo, Inc. (PEP) shows moderate financial fundamentals with a PE ratio of 27.40, profit margin of 8.77%, and ROE of 43.03%. The company generates $93.7B in annual revenue with weak year-over-year growth of 0.42%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 39.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze PEP's fundamental strength across five key dimensions:
Efficiency Score
WeakPEP struggles to generate sufficient returns from assets.
Valuation Score
ModeratePEP shows balanced valuation metrics.
Growth Score
WeakPEP faces weak or negative growth trends.
Financial Health Score
WeakPEP carries high financial risk with limited liquidity.
Profitability Score
ModeratePEP maintains healthy but balanced margins.
Key Financial Metrics
Is PEP Expensive or Cheap?
P/E Ratio
PEP trades at 27.40 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, PEP's PEG of 1.95 indicates fair valuation.
Price to Book
The market values PepsiCo, Inc. at 11.06 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.81 times EBITDA. This signals the market has high growth expectations.
How Well Does PEP Make Money?
Net Profit Margin
For every $100 in sales, PepsiCo, Inc. keeps $8.77 as profit after all expenses.
Operating Margin
Core operations generate 12.24 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $43.03 in profit for every $100 of shareholder equity.
ROA
PepsiCo, Inc. generates $7.67 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
PepsiCo, Inc. produces operating cash flow of $12.05B, showing steady but balanced cash generation.
Free Cash Flow
PepsiCo, Inc. produces free cash flow of $7.65B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $5.60 in free cash annually.
FCF Yield
PEP converts 3.40% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
27.40
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.95
vs 25 benchmark
P/B Ratio
Price to book value ratio
11.06
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.40
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.45
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.85
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.43
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.15
vs 25 benchmark
How PEP Stacks Against Its Sector Peers
| Metric | PEP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 27.40 | 23.25 | Worse (Expensive) |
| ROE | 43.03% | 1240.00% | Weak |
| Net Margin | 8.77% | -9728.00% (disorted) | Weak |
| Debt/Equity | 2.45 | 0.77 | Weak (High Leverage) |
| Current Ratio | 0.85 | 2.54 | Weak Liquidity |
| ROA | 7.67% | -203388.00% (disorted) | Weak |
PEP 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 PepsiCo, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
39.36%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
33.43%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
32.07%
Industry Style: Defensive, Dividend, Low Volatility
High Growth