PepsiCo, Inc. (PEP)
Fair ValueFundamental
64
Price
$125.97
Market Cap
$171.66B
Part 1 · What the company is worth
Overview
PepsiCo makes and sells packaged snacks and beverages worldwide: chips and snacks such as Lay's and Doritos, beverages such as Pepsi, Gatorade and Mountain Dew, and packaged foods such as Quaker oats. It owns some of its concentrate and bottling operations directly and franchises others to independent bottlers who pay for the syrup and distribute the finished drink. Its products reach consumers mainly through supermarkets, convenience stores and one dominant retail customer.
How it makes money
Revenue comes from selling branded, ready-to-eat food and drinks at a markup over the cost of ingredients, packaging and distribution; scale in manufacturing and a shelf-space advantage with retailers keep costs down. A slice of beverage revenue is concentrate sold to independent bottlers rather than the finished can, which carries a different, higher margin. Growth has come mainly from price increases and from stronger demand in snacks, with steadier but slower-growing beverage volumes.
Revenue by segment
Beverage concentrate, finished drinks and bottling across the United States and Canada — Pepsi, Gatorade, Mountain Dew and related brands.
Salty and savory snacks plus Quaker breakfast foods sold across North America, led by Lay's, Doritos and Quaker Oats.
Snack and beverage brands sold across Europe, the Middle East and Africa, a mix of owned and franchised bottling.
Snack foods manufactured and sold across Latin America, PepsiCo's largest foods business outside North America.
Concentrate and franchise fees from independently owned bottlers that make and distribute Pepsi-brand drinks outside North America.
Snack foods sold across Asia, Australia, New Zealand and China, the smallest of PepsiCo's six reporting segments.
Competitive moat
Brand · WideLay's, Pepsi, Gatorade, Doritos and Quaker are decades-old household names that retailers feel obliged to stock and that consumers reach for out of habit rather than comparison shopping. That brand recognition, combined with a distribution network built over generations, is hard for a new entrant to replicate at PepsiCo's scale.
What drives demand
DefensivePeople keep buying snacks and soft drinks in good times and bad, so volumes hold up better than in most consumer categories through a downturn. Demand shifts instead with health trends, private-label competition on price, and how much of a price increase shoppers will tolerate before trading down.
Key risks
- Concentration with one large retailer — PepsiCo states that the loss of Walmart, including Sam's Club, as a customer would have a material adverse effect on its North American beverage and food segments specifically.
- Shifting health preferences — Changing consumer tastes toward healthier eating, and the growing use of appetite-suppressing medications, could reduce demand for snacks and sugary drinks over time.
- Commodity cost volatility — The cost of ingredients such as potatoes, oils, sugar and packaging materials is volatile, and tariffs or supply disruptions can raise costs faster than prices can be adjusted.
- International and currency exposure — A large share of revenue is earned outside the United States, so foreign-currency swings, local regulation and geopolitical disruption in dozens of countries affect reported results.
Customer concentration
Top customers account for 14% of revenue
Walmart and Sam's Club together bought about 14% of PepsiCo's revenue in 2025, spanning nearly every segment. Losing that shelf space, or a dispute over terms, would hit results across the whole company at once.
The case for
Buyers argue that decades-old brands, an unmatched retail distribution network and steady demand for snacks and drinks let PepsiCo raise prices through inflation without losing much volume, supporting years of reliable earnings growth.
The case against
Sellers worry that healthier-eating trends and appetite-suppressing drugs erode demand for salty snacks and sugary beverages over time, that private-label competitors undercut on price, and that dependence on one giant retailer for a meaningful share of sales limits PepsiCo's negotiating leverage.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 19, 2026 with claude-haiku-4-5 — shared with all users
PepsiCo names Coca-Cola as its main beverage rival: the two fight shelf by shelf for the same carbonated soft drink, sports drink and bottled water buyers worldwide.
Keurig Dr Pepper sells the third large family of North American soft drinks and bottled beverages, competing for the same supermarket, convenience store and restaurant contracts as Pepsi.
Mondelēz is the closest global rival to PepsiCo's Frito-Lay and Quaker snacks, competing for the same snacking occasion and the same shelf space in grocery aisles.
Monster leads the energy drink category where PepsiCo sells Rockstar and distributes Celsius, targeting the same young, high-frequency beverage buyer.
Red Bull, privately held in Austria, is the other dominant energy drink brand worldwide and competes directly with PepsiCo's energy portfolio in the same chilled coolers.
Nestlé competes with PepsiCo across bottled water, ready-to-drink coffee and packaged snacks and breakfast foods in most of the international markets both serve.
Balance Sheet & Liquidity
Revenue
$98.24B
Trailing 12 months (through 9/5/2026)
Net Income
$10.90B
Trailing 12 months (through 9/5/2026)
Free Cash Flow
$7.67B
Total Equity
$20.41B
Total Liabilities
$86.85B
Current Ratio
0.94
Interest Coverage
13.61
Debt/EBITDA
3.79
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$123.54
Current Price
$125.97
Margin of Safety
-2.0%
Fair Value Range
$108.37 - $138.71
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
15.83
ROE
40.4%
P/B Ratio
7.70
P/FCF
16.39
Gross Margin
54.2%
ROIC
15.3%
Profitability Radar
Value Creation (Economic Moat)
ROIC
15.3%
WACC
6.4%
ROIC − WACC
+8.9 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (16)
- EPS shows upward trend
- ROIC 15.4%
- Gross margin 54.2%
- P/FCF 16.39
- Operating margin 15.3%
- Positive free cash flow
- Current ratio
- Interest coverage
- Debt/EBITDA
- Return on tangible assets
- ROE 50.2%
- Revenue growth 5Y 5.9%
- Earnings quality (operating cash flow / net income) 1.34
- Share dilution -0.3%
- Net margin trend 11.1% vs 7.8%
- Piotroski F-Score 6/9
Failed (11)
- EPS CAGR 3.19%
- Price CAGR 2.21%
- P/B ratio 7.70
- Debt/equity ratio
- CapEx intensity
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- Analyst consensus: 40% buy
- Earnings surprise, average 0.6%
- PEG ratio 5.06
Unavailable (1)
- Dividend payout –
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Ramon Luis Laguarta | Chairman & CEO | 61 |
| Mr. Stephen T. Schmitt | Executive Vice President & CFO | 51 |
| Ms. Rebecca Schmitt | Executive VP & Chief People Officer | 51 |
| Mr. Silviu Yeugeniu Popovici | Chief Executive Officer of Europe, Middle East & Africa | 57 |
| Mr. Steven C. Williams | Executive VP, Vice Chairman of Global Chief Commercial Officer & Corporate Affairs and Chairman | 59 |
| Ms. Tara Glasgow | Executive VP & Chief Science Officer | - |
| Mr. David J. Flavell | Executive VP, General Counsel & Corporate Secretary | - |
| Ms. Jane Caroline Wakely | Executive VP, Chief Consumer & Marketing Officer and Chief Growth Officer of International Foods | 53 |
| Mr. Stephen Kehoe | Executive VP & Chief Corporate Affairs Officer | - |
| Mr. Eugene Willemsen | Chief Executive Officer of International Beverages | 58 |
Audit Risk
8
Board Risk
4
Compensation Risk
5
Shareholder Rights Risk
3
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-03
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-10-08
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-10-08
via SEC EDGAR
Income History
via SEC EDGAR
Latest News
Recent headlines for PEP, sourced from Markets Gazette.
- 2d agoNEGATIVEPepsiCo Is Raising €1 Billion a Day After Cutting Profit Outlook
PepsiCo Inc. has launched a €1 billion bond issuance in the European market, just one day after announcing a reduction in its profit forecast. The company cited escalating costs in North America as the primary driver for the lowered outlook. This dual action of raising debt while signaling weaker profitability could be interpreted by investors as a sign of financial strain or a strategic move to shore up liquidity amidst rising operational expenses. The market will be watching closely for how this debt impacts PepsiCo's leverage ratios and future earnings.
- 3d agoNEUTRALBarclays’ Lauren Lieberman on PepsiCo Earnings
Barclays analyst Lauren Lieberman suggests PepsiCo's recent share price uptick is a technical rebound rather than a sign of fundamental strength. The key takeaway for investors is the company's admission that its current strategy is insufficient and requires significant changes. While lowered full-year guidance was expected, the acknowledgment of strategic shortcomings is a notable development. This suggests potential for future restructuring or strategic shifts that could impact long-term performance, making the stock's immediate reaction less indicative of sustained optimism.
- 3d agoNEGATIVE‘We don’t feel good’: PepsiCo plans price hike on Doritos, Ruffles, SunChips and sodas after offsetting costs with $178 million tariff refund
PepsiCo Inc. announced plans to increase prices on popular snack brands like Doritos, Ruffles, and SunChips, as well as its sodas. This move comes after the company received a $178 million tariff refund, which it used to offset previous costs. However, the company expressed concerns about consumer sentiment, stating, 'We don’t feel good' about the upcoming price hikes. The decision to raise prices, despite receiving a significant refund, could negatively impact consumer demand, especially given the current financial strain on many U.S. households. Investors will monitor sales volumes for signs of consumer resistance.
- 4d agoNEGATIVELe azioni PepsiCo previste in ulteriore calo dopo gli utili
PepsiCo (PEP) shares are facing a significant downturn, having fallen approximately 25% from their yearly high. The derivatives market anticipates that the upcoming earnings report on October 8th will not provide substantial relief. Consensus estimates project earnings per share of $2.29 on revenues nearing $25 billion, indicating roughly 4.2% year-over-year revenue growth. Options data suggests that traders are bracing for a further decline in PEP stock following the earnings release, which is scheduled before market open on Thursday. This sentiment points to continued bearish pressure on the stock.
- 12d agoNEGATIVEAzioni PepsiCo in calo dopo il secondo declassamento per problemi in Nord America
PepsiCo shares experienced a decline of approximately 0.47% on Tuesday following a downgrade by JPMorgan, marking the second such action from a major bank this week. JPMorgan downgraded the food and beverage giant from Overweight to Neutral, slashing its price target to $138 from $170. This move, mirroring Deutsche Bank's earlier downgrade, cites a slowdown in PepsiCo's North American business, rising costs, and increasing uncertainty surrounding the company's strategic direction. The stock is now down roughly 10% year-to-date, with its last closing price at $128.50. The downgrades suggest headwinds are impacting investor sentiment and future growth prospects.
via Markets Gazette