KO Stock Risk & Deep Value Analysis
Coca-Cola Co
Consumer Defensive • Beverages - Non-Alcoholic
DVR Score
out of 10
What You Need to Know About KO Stock
We analyzed Coca-Cola Co using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran KO through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Conservative. Here's what we found.
KO Risk Analysis & Red Flags
What Could Go Wrong
While KO's business model is robust, its sheer size in a mature market means growth is inherently capped. A significant and prolonged global economic downturn could impact consumer spending on discretionary beverages, and an accelerated shift in consumer preferences away from established carbonated soft drinks could erode its core revenue base, making even its modest growth targets challenging.
Risk Matrix
Overall
Conservative
Financial
Low
Market
Low
Competitive
Medium
Execution
Low
Regulatory
Medium
Red Flags
- ⚠
CEO James Quincey sold 250,000 shares in March 2026 (~$19.8M), which can be interpreted as a lack of strong conviction in substantial near-term upside.
- ⚠
The beverage industry faces ongoing regulatory pressure (e.g., sugar taxes) and health-conscious consumer shifts, requiring constant innovation to maintain relevance.
Upcoming Risk Events
- 📅
Potential negative outcome from IRS tax dispute (ongoing risk)
- 📅
Consumer shift away from sugary drinks accelerating faster than product diversification
When to Reconsider
- 🚪
Sustained organic unit case volume declines for 2-3 consecutive quarters.
- 🚪
Operating margin compression below 30% for two consecutive quarters.
- 🚪
Reduction or stagnation of dividend growth.
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What Does Coca-Cola Co (KO) Do?
Market Cap
$339.19B
Sector
Consumer Defensive
Industry
Beverages - Non-Alcoholic
Employees
69,700
The Coca-Cola Company, a beverage company, manufactures and sells various nonalcoholic beverages in the United States and internationally. The company provides sparkling soft drinks and flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers comprising restaurants and convenience stores. The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine free Diet Coke, Cherry Coke, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Ciel, Costa, Crystal, Dasani, dogadan, Fuze Tea, Georgia, glacéau smartwater, glacéau vitaminwater, Gold Peak, I LOHAS, Powerade, Topo Chico, Core Power, Del Valle, fairlife, innocent, Maaza, Minute Maid, Minute Maid Pulpy, and Simply brands. It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators. The company was founded in 1886 and is headquartered in Atlanta, Georgia.
Visit Coca-Cola Co WebsiteInvestment Thesis
Coca-Cola represents a quintessential defensive investment, offering stability and reliable dividend income due to its wide economic moat, global reach, and strong brand portfolio. While lacking 10x growth potential, its consistent performance, improving margins, and incremental organic growth make it a stable core holding for conservative investors or as a defensive component within an aggressive growth portfolio.
Is KO Stock Undervalued?
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KO Price Targets & Strategy
12-Month Target
$81.25
Bull Case
$87.75
Bear Case
$71.50
Valuation Basis
Based on 25x forward P/E applied to the midpoint of updated FY26 EPS guidance of $3.25
Entry Strategy
For long-term dividend investors, dollar-cost averaging in the $75-$78 range (near 50-day SMA) is suitable. For those seeking 10x growth, KO is not a suitable entry.
Exit Strategy
Take profit above $85.00 for short-term gains; long-term holders may exit on fundamental deterioration (e.g., sustained volume declines, dividend cut). Stop loss below $70.00.
Portfolio Allocation
0% for a portfolio strictly targeting 10x growth opportunities. For a diversified aggressive portfolio, 1-3% as a defensive, income-generating holding.
Price Targets & Strategy
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Is KO Financially Healthy?
Valuation
P/E Ratio
24.76
Forward P/E
24.07
EV/EBITDA
18.50
PEG Ratio
2.89
Price/Book
27.80
Price/Sales
7.20
Profitability
Gross Margin
61.74%
Operating Margin
30.01%
Net Margin
27.80%
Return on Equity
43.62%
Revenue Growth
5.11%
EPS
$3.18
Balance Sheet
Current Ratio
1.46
Quick Ratio
1.14
Debt/Equity
1.41
Total Debt
$28.00B
Cash & Equivalents
$9.50B
Cash Flow
Operating Cash Flow
$11.20B
Free Cash Flow
$12.50B
EBITDA
$14.80B
Other
Beta (Volatility)
0.37
Dividend Yield
2.70%
Does KO Have a Competitive Moat?
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🏰 Wide
Moat Trend
Stable
Moat Sources
4 Identified
Coca-Cola's moat is exceptionally durable due to its globally recognized brands, vast distribution system that's difficult to replicate, and the efficient scale of its concentrate production which grants a cost advantage. These factors create strong customer loyalty and high barriers to entry, ensuring its competitive position for decades.
Moat Erosion Risks
- •Evolving consumer preferences towards unbranded or niche healthy beverages.
- •Increased localized competition from craft or regional brands.
KO Competitive Moat Analysis
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KO Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral - Stable interest from long-term dividend investors, but limited excitement for high-growth seekers.
Institutional Sentiment
Neutral - Analyst consensus for Q1 2026 was generally accurate; updated FY26 EPS guidance is slightly positive. No major upgrades/downgrades in provided data.
Insider Activity (Form 4)
CEO James Quincey sold 250,000 shares ($19,784,711.25) on March 3, 2026.
Options Flow
Normal options activity for a stable mega-cap, typically favoring defensive strategies rather than aggressive directional bets.
Earnings Intelligence
Next Earnings
Estimated late July 2026
Surprise Probability
Medium
Historical Earnings Pattern
KO typically delivers steady earnings results. Stock price reaction tends to be modest, moving within a narrow range unless guidance significantly surprises or a major strategic shift is announced.
Key Metrics to Watch
Competitive Position
Top Competitor
PEP (PepsiCo, Inc.)
Market Share Trend
Gaining value share in total NARTD beverages in Q1 2026, driven by key brands and regions, indicating stable to improving competitive position.
Valuation vs Peers
Based on general market knowledge, KO typically trades at a slight premium or comparable P/E to PepsiCo due to its pure-play beverage focus and strong brand, while PepsiCo's food division can sometimes command a different multiple. (Specific current valuation data unavailable in research).
Competitive Advantages
- •Unparalleled global distribution network
- •Iconic brand portfolio with strong pricing power
- •Asset-light concentrate business model
Market Intelligence
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What Could Drive KO Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings (estimated July 29, 2026)
- •Continued market share gains in key emerging markets
Medium-Term (6-18 months)
- •Expansion of low/no-sugar beverage portfolio
- •Strategic partnerships in functional beverage space
Long-Term (18+ months)
- •Further digital transformation of supply chain and marketing
- •Increased focus on personalized hydration solutions
Catalysts & Growth Drivers
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What's the Bull Case for KO?
- ✓
Sustained positive organic revenue growth (above 5% YoY)
- ✓
Continued operating margin expansion, indicating effective cost management and pricing power.
Bull Case Analysis
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Competing with KO
See how Coca-Cola Co compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Coca-Cola Co KO | $339.2B | 0.5 | 24.8 | $48.9B | 27.8% | 5.1% | |
Costco Wholesale Corp COST | — | 0.7 | — | — | — | — | Compare → |
PepsiCo Inc PEP | — | 0.1 | — | — | — | — | Compare → |
Procter & Gamble Co PG | — | 0.2 | — | — | — | — | Compare → |
Walmart Inc WMT | $1.0T | 0.7 | 47.4 | $713.2B | 3.1% | 4.7% | Compare → |
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How Coca-Cola Co Makes Money
The Coca-Cola Company primarily operates as a beverage concentrate and syrup manufacturer, which it sells to bottling partners worldwide. These partners then produce, package, and distribute the finished beverages to retailers and consumers. KO also sells finished beverages directly in some markets. Its revenue is generated through selling concentrates and syrups, and, to a lesser extent, from selling finished products and fountain syrups. This asset-light model, relying heavily on its vast network of bottling partners, allows for high margins and global scalability.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Coca-Cola Co (KO)?
As of May 8, 2026, Coca-Cola Co has a DVR Score of 0.5 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Coca-Cola Co?
Coca-Cola Co's market capitalization is approximately $339.2B. The company operates in the Consumer Defensive sector within the Beverages - Non-Alcoholic industry.
What ticker symbol does Coca-Cola Co use?
KO is the ticker symbol for Coca-Cola Co. The company trades on the NYQ.
What is the risk level for KO stock?
Our analysis rates Coca-Cola Co's overall risk as Conservative. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of KO?
Coca-Cola Co currently has a price-to-earnings (P/E) ratio of 24.8. This is in line with broader market averages.
Does Coca-Cola Co pay a dividend?
Yes, Coca-Cola Co pays a dividend with a current yield of approximately 2.70%.
Is Coca-Cola Co's revenue growing?
Coca-Cola Co has reported revenue growth of 5.1%. The company is growing at a moderate pace.
Is KO stock profitable?
Coca-Cola Co has a profit margin of 27.8%. This indicates strong profitability.
How often is the KO DVR analysis updated?
Our AI-powered analysis of Coca-Cola Co is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 8, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for KO (Coca-Cola Co) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.