What Happened?
Shares of beverage company Zevia (NYSE: ZVIA) jumped 44.6% in the afternoon session after the company reported strong first quarter 2025 results which significantly beat analysts' EBITDA expectations and saw EPS outperform Wall Street's estimates. Sales dipped 2% year over year, but volumes stayed flat and pricing remained stable, helped by expanded shelf space at Walmart and offset by reduced exposure to the club channel and one mass retail customer. Zooming out, we think this was a solid print.
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What The Market Is Telling Us
Zevia’s shares are extremely volatile and have had 89 moves greater than 5% over the last year. But moves this big are rare even for Zevia and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 13.8% on the news that the company reported underwhelming preliminary fourth-quarter 2024 results with expectations for wider losses driven by increased spending on its holiday campaign. Precisely, the company expected an Adjusted EBITDA loss of $3.9 million to $4.2 million, compared to previous expectations for losses of $1.8 million to $2.2 million. In addition, sales were expected to be within the previous guidance range, which is less than exciting and mostly in line with consensus estimates. However, Zevia wasn't the only one to report weak holiday demand, as Five Below and Abercrombie & Fitch also didn't see the success that the market expected.
Zevia is down 33.6% since the beginning of the year, and at $3.05 per share, it is trading 36.9% below its 52-week high of $4.83 from January 2025. Investors who bought $1,000 worth of Zevia’s shares at the IPO in July 2021 would now be looking at an investment worth $223.44.
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