Coca-Cola KO
What does Coca-Cola do?
Coca-Cola is one of the world's largest beverage companies and markets a broad range of non-alcoholic drinks. These include cola brands such as Coca-Cola, Diet Coke and Coca-Cola Zero Sugar, as well as soft drinks such as Fanta and Sprite, and also water, sports drinks, coffee and tea beverages, juices, dairy-based drinks and plant-based products.
The business model is predominantly brand-based: the company produces beverage concentrates and syrups and sells them to bottling partners, which manufacture, bottle and distribute the products to retail and food service. In addition, there are fountain syrups for restaurants and convenience stores. This asset-light approach allows high margins. In competition, Coca-Cola benefits from global brand strength, a dense distribution network and large marketing power, but competes with PepsiCo, regional providers and private labels.
Score profile
Rank vs. Beverages - Non-Alcoholic (8 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Coca-Cola ranks among the best in the group Beverages - Non-Alcoholic (8.8/10). On growth, the company ranks in the middle in the group Beverages - Non-Alcoholic (4.4/10). On valuation (higher = cheaper), the stock ranks below average in the group Beverages - Non-Alcoholic (2.1/10). On financial strength, Coca-Cola ranks below average in the group Beverages - Non-Alcoholic (2.3/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 27.5x | 19.4x | better than 31 % |
| Trailing P/E | 28.6x | 30.9x | better than 56 % |
| PEG ratio | 4.0x | 3.0x | better than 14 % |
| EV/EBITDA | 25.3x | 15.9x | better than 19 % |
| Price/sales | 8.2x | 2.8x | better than 19 % |
| Price/book | 11.2x | 8.8x | better than 7 % |
| Revenue growth | 7.4% | 12.1% | better than 44 % |
| Earnings growth | 8.3% | 12.9% | better than 44 % |
| Gross margin | 62.3% | 49.0% | better than 94 % |
| Operating margin | 33.4% | 19.4% | better than 94 % |
| Net margin | 28.7% | 13.0% | better than 94 % |
| Return on equity | 40.6% | 36.1% | better than 69 % |
| Debt/equity | 107.5% | 19.1% | better than 19 % |
| Current ratio | 1.4x | 1.7x | better than 44 % |
| Free cash flow yield | 1.0% | 3.2% | better than 6 % |
| Dividend yield | 2.2% | 2.3% | – |
| Payout ratio | 62.0% | 67.5% | – |
| Beta | 0.27 | 0.56 | – |
Valuation: what is Coca-Cola worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Coca-Cola a model range of 58.93 USD to 68.40 USD per share.
24 analysts, average rating “Buy”, average price target 97.75 USD (+0.8%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Brand strength allows price adjustments and stable demand, even in economically weaker periods.
- The concentrate business with bottling partners provides an asset-light model with a high share of value-added income.
- Growth in emerging markets and product innovation in reduced-sugar and alternative beverages broaden sales.
Risks
- Health awareness, sugar taxes and stricter regulation can weigh on demand for sweetened beverages permanently.
- Exchange rate fluctuations have a strong effect, as a large part of revenue arises outside the US in foreign currencies.
- Rising raw material, packaging and energy costs as well as dependence on bottling partners can impair margins and sales.
What to look for with Coca-Cola
The operating margin shows how well the brand-driven, asset-light model converts pricing power and cost discipline into profit.