One-glance verdict
Overvalued
$111.57 our estimate vs market $137.63
Wall Street consensus: $155.00 (38.9% higher than our fair-value estimate)
23% above our estimate, beyond the bull case
Fundamentals snapshot
PepsiCo, Inc.
PEP · NMS · Consumer Defensive · Beverages - Non-Alcoholic
Current price
$137.63
52-week range
$133.73 - $171.48
Market cap
$188.00B
Balance sheet
Distressed
12.03x Strong cushion
Net debt $42.50B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.2% last year.
- Reward Returns 51.5% on equity, ahead of 83% of its peers.
- Risk Net debt grew 18.0% over 3 years.
- Risk Insider ownership is only 0.2% (peer median: 5.0%).
What this company does
PepsiCo, Inc.
PepsiCo is the global company behind popular drinks like Pepsi and Gatorade and a huge variety of snack foods such as Lay's chips and Quaker Oats. The company makes money by using its vast supply chain (the network for making, shipping, and selling products) to get these everyday items into nearly every type of store around the world. Because its sales are well-balanced between both food and drinks and spread across many countries, its business isn't overly reliant on the success of just one product or region.
How the company got here
PepsiCo was formed in 1965 through the merger of the Pepsi-Cola Company and Frito-Lay, Inc. This key event brought together a popular beverage maker, founded by pharmacist Caleb Bradham in 1898, with a successful snack food company. Over the years, PepsiCo expanded by acquiring other major brands that are household names. These acquisitions included Tropicana juices, and the Quaker Oats Company, which also brought the Gatorade sports drink brand into its portfolio.
What it actually does
PepsiCo is a global company that makes and sells a wide variety of beverages and convenient foods. You would recognize many of its brands from grocery stores, convenience stores, and restaurants. Its products include well-known soft drinks like Pepsi and Mountain Dew, snacks like Lay's potato chips and Doritos, sports drinks like Gatorade, and breakfast foods from Quaker Oats. The company operates in more than 200 countries, and its products are consumed over a billion times a day.
Frito-Lay North America
This is PepsiCo's snack division in the United States and Canada, and it's a very large and profitable part of the company. It sells many of the most popular snack chips, such as Lay's, Doritos, Cheetos, and Tostitos. This segment makes money by selling these snacks to stores and distributors. It represents a major slice of PepsiCo's business, accounting for roughly a quarter of the company's total revenue.
PepsiCo Beverages North America
This is the company's largest single business, responsible for selling its wide range of drinks in the U.S. and Canada. This segment includes not just the famous Pepsi soft drink, but also other popular brands like Mountain Dew, Gatorade, and Aquafina bottled water. It generates revenue (the total amount of money a company brings in from sales) by manufacturing and selling these beverages to retailers and distributors. This division is the biggest contributor to the company's overall sales.
Quaker Foods North America
This part of the company focuses on breakfast and grain-based foods, primarily in the U.S. and Canada. Its most famous brand is Quaker Oatmeal, but it also makes other products like Cap'n Crunch cereal, and Rice-A-Roni side dishes. While it is the smallest of PepsiCo's North American businesses, it holds a leading position in the oatmeal market.
International
This part of the business covers all food and beverage sales outside of North America, organized into divisions for Latin America; Europe; Africa, Middle East, and South Asia (AMESA); and Asia Pacific, Australia/New Zealand and China (APAC). These divisions sell both global brands like Pepsi and Lay's, as well as local snack brands tailored to regional tastes, such as Walkers crisps in the U.K. and Sabritas in Mexico. Combined, these international operations make up a significant portion of the company's total revenue, showing its global reach.
What management is betting on now
The company is focused on a strategy it calls 'Winning with PepsiCo Positive (pep+),' which aims to connect its business growth with sustainability. This means they are working on things like using more environmentally friendly packaging and farming methods. Management is also focused on growing its core brands and introducing new, often healthier, product options to meet changing consumer tastes. A key goal is to become more efficient in its operations to save money that can be reinvested into the business to fuel growth.
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
$3.76B
FY2024 Q4
$3.82B
FY2025 Q1
$-1.58B
FY2025 Q2
$1.06B
FY2025 Q3
$3.48B
FY2025 Q4
$4.70B
FY2026 Q1
$-406.00M
FY2026 Q2
$1.50B
Revenue
$24.18B
Net income
$2.98B
Diluted EPS
2.18
Operating cash flow
$2.32B
Free cash flow
$1.50B
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Sources
Revenue
$19.44B
Net income
$2.33B
Diluted EPS
1.70
Operating cash flow
$41.00M
Free cash flow
$-406.00M
Fetching…
Sources
Revenue
$29.34B
Net income
$2.54B
Diluted EPS
1.85
Operating cash flow
$6.62B
Free cash flow
$4.70B
Fetching…
Sources
Revenue
$23.94B
Net income
$2.60B
Diluted EPS
1.90
Operating cash flow
$4.47B
Free cash flow
$3.48B
Fetching…
Sources
Revenue
$22.73B
Net income
$1.26B
Diluted EPS
0.92
Operating cash flow
$1.97B
Free cash flow
$1.06B
Fetching…
Sources
Revenue
$17.92B
Net income
$1.83B
Diluted EPS
1.33
Operating cash flow
$-973.00M
Free cash flow
$-1.58B
Fetching…
Sources
Revenue
$27.78B
Net income
$1.52B
Diluted EPS
1.11
Operating cash flow
$6.29B
Free cash flow
$3.82B
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Sources
Revenue
$23.32B
Net income
$2.93B
Diluted EPS
2.13
Operating cash flow
$4.91B
Free cash flow
$3.76B
Fetching…
Sources
Is it cheap or expensive?
Fair value $111.57 vs current price $137.63
Wall Street consensus is the average analyst price target: $155.00 (38.9% higher than our fair-value estimate).
Our most-likely fair value is $111.57 a share — about 18.9% below today's price of $137.63, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $42.5B. Interest coverage 12.0x.
Net debt
$42.50B
Interest coverage
12.03x
PepsiCo, Inc.'s profit covers its interest bill about 12.0 times over. which is stronger than every peer shown here.
Distressed
Worse cushion
Baseline
Better cushion
PEP
BASELINE
PepsiCo, Inc.
Total debt $53.21B Interest coverage 12.03x This is the baseline the peer rows are being compared against.
Total debt $44.26B Interest coverage 9.02x -25% vs PEP Carries about 1.3x less debt cushion than PEP.
Total debt $22.06B Interest coverage 6.04x -50% vs PEP Carries about 2.0x less debt cushion than PEP.
Total debt $77.68B Interest coverage 7.67x -36% vs PEP Carries about 1.6x less debt cushion than PEP.
Total debt $33.53B Interest coverage 4.84x -60% vs PEP Carries about 2.5x less debt cushion than PEP.
Total debt $19.00B Interest coverage 4.90x -59% vs PEP Carries about 2.5x less debt cushion than PEP.
What you should know
The case for and against PEP
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.2% last year.
-
Returns 51.5% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 18.0% over 3 years.
-
Insider ownership is only 0.2% (peer median: 5.0%).
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)
18.06x
Forward P/E
15.33x
P/B
8.51x
P/S
1.94x
EV/EBITDA
12.21x
PEG ratio
1.43x
Profitability
How much profit each dollar creates
Gross margin
54.2%
Operating margin
16.8%
Net margin
10.8%
ROE
51.5%
ROA
8.9%
Health
Liquidity and balance-sheet strength
Debt / equity
2.39x
Current ratio
0.93x
Quick ratio
0.69x
Total debt
$53.21B
Total cash
$10.72B
Growth
How the business has been compounding
Revenue TTM
$96.90B
Revenue 5Y CAGR
4.3%
EPS TTM
7.62
EPS 5Y CAGR
-2.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$13.46B
Free CF TTM
$7.67B
FCF margin
7.9%
Dividend
Shareholder payout
Yield
4.3%
Payout ratio
75.3%
Last ex-div date
2026-09-04