One-glance verdict
Overvalued
$5.62 our estimate vs market $30.69
Wall Street consensus: $36.21 (544.0% higher than our fair-value estimate)
446% above our estimate, beyond the bull case
Fundamentals snapshot
Keurig Dr Pepper Inc.
KDP · NMS · Consumer Defensive · Beverages - Non-Alcoholic
Current price
$30.69
52-week range
$24.88 - $33.82
Market cap
$41.76B
Balance sheet
Stretched
4.84x Stretched
Net debt $32.00B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 21.0% last year.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 16.1% above its 5-year average P/E.
- Risk Net debt grew 15.8% over 3 years.
What this company does
Keurig Dr Pepper Inc.
Keurig Dr Pepper is a large beverage company that sells popular soft drinks like Dr Pepper and Snapple, in addition to its Keurig coffee makers and the K-Cup pods used with them. The company makes its money from traditional drink sales in stores and also benefits from recurring revenue (the predictable income from customers who repeatedly buy coffee pods for their Keurig machines). This combination of selling both well-known drinks and a popular coffee system with repeat purchases gives the business a diverse and stable way to earn money.
How the company got here
The company you see today was formed in 2018 when two beverage giants joined forces: Keurig Green Mountain and Dr Pepper Snapple Group. Keurig was famous for its single-serve coffee brewers and K-Cup pods, which changed how many people make coffee at home. Dr Pepper Snapple had a long history of creating beloved soft drinks like Dr Pepper, 7UP, and Snapple. This $18.7 billion deal brought hot and cold drinks under one roof, creating one of North America's largest beverage companies.
What it actually does
Keurig Dr Pepper makes and sells a huge variety of drinks for almost any occasion. You'll find their products everywhere, from coffee makers and K-Cup pods for your kitchen counter to cold drinks in vending machines and on supermarket shelves. Their lineup includes well-known sodas, juices, teas, bottled water, and coffee from many popular brands. The company owns some of these brands, licenses (makes agreements to produce and sell) others, and partners with some to distribute their products.
U.S. Refreshment Beverages
This is the company's largest business segment, making up the majority of its revenue (the total money it brings in from sales). It includes the manufacturing and sale of cold drinks like sodas, juices, teas, and water across the United States. You would recognize many of these brands, such as Dr Pepper, Canada Dry, Snapple, Mott's, and Core Hydration. This part of the business gets drinks to stores either directly with its own trucks or through larger warehouses.
U.S. Coffee
This segment is all about at-home coffee and revolves around the famous Keurig single-serve brewing system. The company sells the coffee machines themselves and, more importantly, the K-Cup pods that go in them. While they own coffee brands like Green Mountain Coffee Roasters and The Original Donut Shop, a big part of this business is making and selling K-Cup pods for other major brands like Starbucks, Dunkin', and Peet's Coffee. This makes it easy for people to enjoy their favorite coffee shop brands with the convenience of a Keurig machine at home.
International
This is a smaller but growing part of the company that handles sales outside of the United States, primarily in Canada and Mexico. In these countries, the company manufactures and sells many of the same types of beverages you see in the U.S., including sodas and other soft drinks. They sell their own brands as well as distribute products for other companies to retailers and distributors in those regions. Management sees this segment as an increasingly important driver for future growth.
What management is betting on now
The company is currently undergoing a major transformation by planning to separate into two independent, publicly traded companies by 2027. One company, called Beverage Co., will focus entirely on refreshment beverages like sodas and juices. The other, Global Coffee Co., will be a dedicated global coffee business, strengthened by the recent large acquisition (the buying of another company) of JDE Peet's. Management believes this will allow each business to better focus on its specific market and grow faster. They are also focused on expanding into high-growth areas like energy drinks and sports hydration through partnerships and acquisitions.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$503.00M
FY2024 Q4
$684.00M
FY2025 Q1
$89.00M
FY2025 Q2
$325.00M
FY2025 Q3
$527.00M
FY2025 Q4
$564.00M
FY2026 Q1
$165.00M
FY2026 Q2
$714.00M
Revenue
$7.31B
Net income
$142.00M
Diluted EPS
0.04
Operating cash flow
$895.00M
Free cash flow
$714.00M
Fetching…
Sources
Revenue
$3.98B
Net income
$270.00M
Diluted EPS
0.20
Operating cash flow
$281.00M
Free cash flow
$165.00M
Fetching…
Sources
Revenue
$4.50B
Net income
$353.00M
Diluted EPS
0.26
Operating cash flow
$712.00M
Free cash flow
$564.00M
Fetching…
Sources
Revenue
$4.31B
Net income
$662.00M
Diluted EPS
0.49
Operating cash flow
$639.00M
Free cash flow
$527.00M
Fetching…
Sources
Revenue
$4.16B
Net income
$547.00M
Diluted EPS
0.40
Operating cash flow
$431.00M
Free cash flow
$325.00M
Fetching…
Sources
Revenue
$3.63B
Net income
$517.00M
Diluted EPS
0.38
Operating cash flow
$209.00M
Free cash flow
$89.00M
Fetching…
Sources
Revenue
$4.07B
Net income
$-144.00M
Diluted EPS
-0.11
Operating cash flow
$849.00M
Free cash flow
$684.00M
Fetching…
Sources
Revenue
$3.89B
Net income
$616.00M
Diluted EPS
0.45
Operating cash flow
$628.00M
Free cash flow
$503.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $5.62 vs current price $30.69
Wall Street consensus is the average analyst price target: $36.21 (544.0% higher than our fair-value estimate).
Our most-likely fair value is $5.62 a share — about 81.7% below today's price of $30.69, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $32.0B. Interest coverage 4.8x.
Net debt
$32.00B
Interest coverage
4.84x
Keurig Dr Pepper Inc.'s profit covers its interest bill about 4.8 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
KDP
BASELINE
Keurig Dr Pepper Inc.
Total debt $33.53B Interest coverage 4.84x This is the baseline the peer rows are being compared against.
Total debt $44.26B Interest coverage 9.02x +86% vs KDP Carries about 1.9x more debt cushion than KDP.
Total debt $53.21B Interest coverage 12.03x +148% vs KDP Carries about 2.5x more debt cushion than KDP.
Total debt $22.45B Interest coverage 6.60x +36% vs KDP Carries about 1.4x more debt cushion than KDP.
Total debt $92.93M Interest coverage 38.30x +690% vs KDP Carries about 7.9x more debt cushion than KDP.
Total debt $674.85M Interest coverage 9.57x +97% vs KDP Carries about 2.0x more debt cushion than KDP.
What you should know
The case for and against KDP
3 Rewards
3 Risks
Rewards
-
Revenue grew 21.0% last year.
-
Free cash flow was positive in 10/10 years.
-
Trades at 30.7x P/E vs peer median 38.7x (20.6% cheaper).
Risks
-
Stock trades 16.1% above its 5-year average P/E.
-
Net debt grew 15.8% over 3 years.
-
Operating margin compressed from 19.8% to 12.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.69x
Forward P/E
12.11x
P/B
1.67x
P/S
2.08x
EV/EBITDA
17.14x
PEG ratio
0.94x
Profitability
How much profit each dollar creates
Gross margin
51.0%
Operating margin
12.9%
Net margin
7.1%
ROE
5.1%
ROA
3.4%
Health
Liquidity and balance-sheet strength
Debt / equity
1.00x
Current ratio
0.48x
Quick ratio
0.20x
Total debt
$33.53B
Total cash
$1.53B
Growth
How the business has been compounding
Revenue TTM
$20.09B
Revenue 5Y CAGR
7.0%
EPS TTM
1.00
EPS 5Y CAGR
14.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.53B
Free CF TTM
$1.50B
FCF margin
7.5%
Dividend
Shareholder payout
Yield
3.0%
Payout ratio
92.9%
Last ex-div date
2026-09-28