One-glance verdict
Overvalued
$11.25 our estimate vs market $34.63
Wall Street consensus: $36.32 (222.7% higher than our fair-value estimate)
208% above our estimate, beyond the bull case
Fundamentals snapshot
Keurig Dr Pepper Inc.
KDP · NMS · Consumer Defensive · Beverages - Non-Alcoholic
Current price
$34.63
52-week range
$24.88 - $34.89
Market cap
$47.13B
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 32.4% 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 (KDP) sells a lot of different drinks, from sodas like Dr Pepper and Canada Dry to coffee pods and even bottled water. They make money from selling these drinks through grocery stores, convenience stores, and directly to people online, which is important because it shows they have many ways to reach customers and keep sales steady. Their success depends on making sure their popular brands are available everywhere people like to buy beverages.
How the company got here
Keurig Dr Pepper as we know it today was formed in 2018 through a significant merger between Keurig Green Mountain, known for its single-serve coffee systems, and Dr Pepper Snapple Group, a company with a long history in carbonated soft drinks and juices. The roots of Dr Pepper go back even further, to 1885, making it one of America's oldest major soft drinks. This union brought together a diverse portfolio of both hot and cold beverages, creating one of North America's largest beverage companies. The company has continued to evolve, making strategic acquisitions and brand expansions to solidify its position in the market.
What it actually does
Keurig Dr Pepper is a major player in the beverage industry, producing, marketing, and distributing a wide array of both hot and cold drinks. They offer everything from the familiar sodas found in any grocery store to specialty coffee and teas. The company's extensive portfolio includes over 125 brands, aiming to provide a beverage for every consumer need, at any time and in any place. Their products are available through various channels, including supermarkets, convenience stores, and online retailers, ensuring broad accessibility for consumers.
U.S. Refreshment Beverages
This segment is a significant part of Keurig Dr Pepper's business, encompassing a wide range of non-alcoholic drinks like sodas, teas, waters, and juices. It includes well-known brands such as Dr Pepper, Canada Dry, Snapple, Mott's, and A&W, offering a variety of flavors and types to consumers. The company manufactures and distributes both the finished beverages and the concentrates and syrups used to make them, working with bottlers, distributors, and retailers. This part of the business is a major revenue driver for Keurig Dr Pepper, making up a substantial portion of its overall sales.
U.S. Coffee
This segment focuses on the coffee side of the business, primarily through the Keurig brand and its single-serve brewing systems. It includes the manufacturing and sale of Keurig brewers and a wide variety of K-Cup pods, which contain coffee, as well as hot and iced teas, and hot cocoa. The company also offers traditional whole bean and ground coffee products. This segment operates on a 'razor-and-blade' model, where the sale of brewers (the 'razor') drives recurring sales of coffee pods (the 'blades').
International
Keurig Dr Pepper also operates in markets outside of the United States, though this is a smaller part of its overall business compared to its U.S. operations. This segment involves the distribution of beverages in countries like Canada and Mexico, leveraging many of the same popular brands found in the U.S. The company's international presence allows it to reach a broader consumer base and diversify its revenue streams beyond its domestic market.
What management is betting on now
Keurig Dr Pepper's current strategy centers on being a leading beverage company in North America, focusing on both hot and cold beverage occasions. A key initiative is to build strong brands and leverage its extensive distribution network, which is described as a significant advantage. The company is also actively expanding into growth categories like energy and sports drinks through a 'build-buy-partner' approach, which involves organic growth, partnerships, and acquisitions. Furthermore, Keurig Dr Pepper is undergoing a significant transformation, planning to separate into two independent companies: one focused on global coffee and the other on North American beverages, a move aimed at unlocking greater value for shareholders.
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 $11.25 vs current price $34.63
Wall Street consensus is the average analyst price target: $36.32 (222.7% higher than our fair-value estimate).
Our most-likely fair value is $11.25 a share — about 67.5% below today's price of $34.63, 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 $51.88B 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 35.0x P/E vs peer median 43.6x (19.7% cheaper).
Risks
-
Stock trades 32.4% 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)
34.98x
Forward P/E
13.69x
P/B
1.88x
P/S
2.35x
EV/EBITDA
18.25x
PEG ratio
1.07x
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
0.99
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
2.7%
Payout ratio
92.9%
Last ex-div date
2026-09-28