On the last trading day, August 14, 2014, stocks of Keurig Green Mountain (NASDAQ:GMCR) went up by 0.7 percent and reached to $114.86 when the company announced that it will increase the prices of its coffee by 9 percent in the coming November. The company decided to raise the prices in lieu of the increasing costs of coffee beans, packaging material, and transport.

Talking about the prices of coffee, the price of green coffee, during the recent year, has increased by more than 55 percent.

Keurig Green Mountain (NASDAQ:GMCR) recently announced that many of its rivals have already raised their prices due to the increased costs of inputs. The company further commented that it had taken this necessary decision after much review and analysis.

The ratings teams of TheStreet gave the stocks of the company a score of B with a rating of ‘buy’. The team, when asked about their decision, said that Keurig Green Mountain (NASDAQ:GMCR) has a number of positive pointers that indicate to a better performance in the upcoming quarters. The team further said that the company has remarkable revenue growth, a solid position in the market, reasonable level of debts, increasing profit margins and good operational cash flow. Moreover, the EPS of the company is also quite impressive. The team said that although the company has not-so-great ROE (returns on equity) but the strengths outweigh the only weakness.

Some other Highlights from the Report:

• The revenue growth of Keurig Green Mountain (NASDAQ:GMCR) has surpassed the industry average of 3 percent. Moreover, an increase of 5.7 percent can be seen when the revenue figures are compared with the figures of the same quarter a year back. The increase in the revenues has reached the bottom line as the EPS is on a rise.
• Coming to the debt to equity ratio of the company, Keurig Green Mountain (NASDAQ:GMCR), currently, has a very low ratio: 0.08. This ratio of the company is far below the industry average, which means that the management of the company is strong. Moreover, the company has 2.32 as its quick ratio, signaling that the company is well capable of covering its short-term cash needs.
• As far as the EPS of the company is concerned, Keurig Green Mountain (NASDAQ:GMCR) has successfully increased the earnings by 23.7 percent when compared with the numbers of the same quarter last year. The company has constantly reported positive earnings for the past 2 years. Last year, Keurig Green Mountain (NASDAQ:GMCR) reported earnings of $3.16; however, this year, the analysts are of the opinion that earnings will go up to $3.80.
• Coming to the net income growth of the company, the numbers have exceeded not only the average of foods industry but also that of the S&P 500. During the most recent quarter, the net income of the company increased by 33.4 percent and reached to $155.15 million.
• The gross profit margin of the company is currently at 49.91 percent, which is quite strong. Moreover, the net profit margin of the company is also above the average of the industry; it is at 15.17 percent.

 

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