The Coca-Cola Company (KO)
Valuation Overview•Is The Coca-Cola Company Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
High-quality fundamentals with a strong composite quality score of 76/100, backed by robust profitability and solvency.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street is broadly bullish, projecting solid upside with steady expected earnings growth. This is paired with healthy capital returns, anchored by a strong dividend yield, though free cash flow coverage appears tight.
KO exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company exhibits steady, low-single-digit revenue growth paired with robust earnings compounding (11.6% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 29.3% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $12.5B | +1.9% | +3.7% | +7.7% | +0.8% | |
| EBITDA | $4.6B | — | +6.8% | — | — | |
| Net Income | $3.9B | +23.3% | +11.2% | — | +6.0% | |
| EPS (Diluted) | $0.91 | +23.6% | +11.6% | +11.2% | +6.2% | |
| Free Cash Flow | $1.8B | +11.7% | -17.8% | -9.4% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 61.7% | 60.7% | 60.1% | 60.5% |
| Operating Margin | 29.3% | 24.9% | 25.3% | 25.0% |
| Net Margin | 27.8% | 24.4% | 24.2% | 20.6% |
| FCF Margin | 25.5% | 14.1% | 18.7% | 19.1% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.81 | $0.86 | +5.9% | ||
| Q1'26 | $0.56 | $0.58 | +2.7% | ||
| Q4'25 | $0.78 | $0.82 | +5.3% | ||
| Q3'25 | $0.83 | $0.87 | +4.3% | ||
| Q2'25 | $0.71 | $0.73 | +2.2% | ||
| Q1'25 | $0.52 | $0.55 | +6.2% | ||
| Q4'24 | $0.74 | $0.77 | +4.1% | ||
| Q3'24 | $0.81 | $0.84 | +4.2% |
Total return is +17.7% (1Y), lagging the benchmark by -7.3%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +16.4% | +7.1% | — |
| 1Y | +17.7% | -7.3% | +3.0% |
| 3YCAGR | +11.7% | -7.6% | +9.7% |
| 5YCAGR | +10.6% | -2.2% | +17.6% |
| 10YCAGR | +8.0% | -5.6% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about The Coca-Cola Company (KO) valuation, health, and returns.
The Coca-Cola Company is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -20.8% downside from DCF intrinsic value of $62.91)
The Coca-Cola Company has multiple valuation anchors: DCF Intrinsic Value: $62.91 | Peer Relative Fair Value: $63.42 | Wall Street Analyst Target: $86.13 (implying +8.5% upside). A convergence of these signals offers higher conviction.
The Coca-Cola Company displays good financial health with a composite quality score of 76/100, supported by a Altman Z-Score of 4.4 (safe zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 15.8%.
The Coca-Cola Company pays a 2.6% dividend yield, covered by a 67% payout ratio with 56 years of growth, supplemented by a 0.2% buyback yield.
The Coca-Cola Company's current growth trajectory is Stable. The company achieved +1.9% 1Y revenue growth and +23.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +3.7%.
Wall Street consensus is Buy based on 48 analysts, beating EPS expectations in 92% of recent quarters with a 9-quarter streak. The consensus price target represents a +8.5% change from current levels.
Investment risks for The Coca-Cola Company include: -8.5% 1-year max drawdown. Volatility risk is characterized by a beta of -0.24x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.