Zevia PBC Faces Market Challenges Amid Promising Developments

Goldman Sachs analyst Bonnie Herzog maintains a neutral stance on Zevia PBC (ZVIA) with a Hold rating, citing better-than-expected Q1 results and record high gross margins. However, guidance for Q2 suggests modest growth, and the company's expansion into Walmart stores raises concerns about navigating a challenging market environment. Telsey Advisory also maintains a Hold rating with a $3.00 price target. ZVIA's stock has seen a 101.31% increase in the past six months.

Zevia PBC (ZVIA) reported its first-quarter 2025 results today, delivering net sales at the high end of expectations, improving net loss, exceeding adjusted EBITDA outlook, and achieving a record gross margin. The company maintained its 2025 guidance.

Key Highlights:
- Net Sales: $38.0 million, a decline of $0.8 million year over year.
- Gross Profit Margin: 50.1%, an improvement of 4.4 percentage points year over year.
- Net Loss: $6.4 million, an improvement of $0.8 million year over year.
- Loss per Share: $0.08, an improvement of $0.02 year over year.
- Adjusted EBITDA Loss: $3.3 million, an improvement of $2.2 million year over year.

Analyst Stance:
Goldman Sachs analyst Bonnie Herzog maintains a neutral stance on Zevia PBC with a Hold rating, citing better-than-expected Q1 results and record high gross margins. However, she expressed concerns about modest Q2 growth and the company's expansion into Walmart stores in a challenging market environment. Telsey Advisory also maintains a Hold rating with a $3.00 price target.

Stock Performance:
Zevia PBC's stock has seen a 101.31% increase in the past six months.

Outlook:
Zevia PBC expects net sales to be in the range of $158 million to $163 million for 2025, and an adjusted EBITDA loss of between $8 million and $11 million. For the second quarter of 2025, the company expects net sales to be in the range of $40.5 million to $42.5 million, and an adjusted EBITDA loss of between $2.2 million and $2.9 million.

References:
[1] https://www.marketscreener.com/quote/stock/ZEVIA-PBC-124966527/news/Zevia-Announces-First-Quarter-2025-Results-49864763/