KO AI Stock Analysis – Buy, Hold, or Avoid?
The Coca-Cola Company (KO)
Coca-Cola (KO) remains a fundamentally strong, defensive stock with reliable cash flows, robust margins, and a premium brand, but its current valuation and only modest growth prospects limit near-term upside. Technicals are bullish and sentiment is positive, yet macro risks and mature market saturation temper the case for aggressive buying at current levels. KO is best suited for income and stability-focused investors, with better entry points likely on pullbacks or after new growth catalysts emerge.
Fundamentals
Coca-Cola (KO) continues to demonstrate consistent financial strength, strong cash generation, and resilient profitability despite broad consumer and FX headwinds. While the company saw modest revenue growth and margin stability, valuation remains elevated relative to the sector, and near-term price momentum has softened after a multiyear high.
Financial Highlights
- Revenue
- Net Income
- Net Margin (%)
Revenue
2.41% YoY
Q4 2025
Net Income
3.46% YoY
Q4 2025
Net Margin
Q4 2025
Growth Metrics
Revenue Growth YoY
Latest Quarter: Q4 2025
Net Income Growth YoY
Latest Quarter: Q4 2025
Revenue Per Share Growth YoY
Latest Quarter: Q4 2025
EPS Growth YoY
Latest Quarter: Q4 2025
Book Value Per Share Growth YoY
Latest Quarter: Q4 2025
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 11.8B | 12.5B | 12.5B | 11.1B | 11.5B | 11.9B | 12.4B | 11.3B |
| Revenue Growth YoY | +2.41% | +5.07% | +1.39% | -1.51% | +6.41% | -0.83% | +3.27% | +2.91% |
| Net Income | 2.3B | 3.7B | 3.8B | 3.3B | 2.2B | 2.8B | 2.4B | 3.2B |
| Net Income Growth YoY | +3.46% | +29.78% | +58.03% | +4.82% | +11.25% | -7.74% | -5.34% | +2.25% |
| EPS | $0.53 | $0.86 | $0.89 | $0.77 | $0.51 | $0.66 | $0.56 | $0.74 |
| EPS Growth YoY | +3.92% | +30.30% | +58.93% | +4.05% | +10.87% | -7.04% | -5.08% | +2.78% |
Profitability Metrics
Gross Margin
TTM
Operating Margin
TTM
Net Margin
TTM
Return on Equity
TTM
Return on Assets
TTM
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 60.05% | 61.49% | 62.39% | 62.59% | 60.04% | 60.65% | 61.08% | 62.52% |
| Operating Margin | 15.57% | 31.97% | 34.14% | 32.88% | 23.47% | 21.17% | 21.29% | 18.95% |
| Net Margin | 19.21% | 29.67% | 30.39% | 29.92% | 19.01% | 24.03% | 19.50% | 28.12% |
| Return on Equity (ROE) | 7.06% | 11.83% | 13.33% | 12.71% | 8.83% | 10.74% | 9.33% | 12.02% |
| Return on Assets (ROA) | 2.96% | 5.00% | 5.29% | 4.76% | 3.18% | 3.87% | 3.50% | 4.73% |
Technical Analysis
KO exhibits a strong bullish technical setup, trading above key moving averages with a golden cross confirmed. The stock is in an advancing phase, supported by robust trend and momentum indicators indicating institutional accumulation and a healthy uptrend.
No extreme reading
Price in uptrend
Strong trend active
50 above 200 - bullish
Key Technical Values
Price with Moving Averages
50-day, 150-day and 200-day simple moving averages
Relative Strength Index
Momentum oscillator measuring speed and magnitude of price changes
RSI (14)
Earnings
Coca-Cola (KO) continues to demonstrate consistent financial strength, strong cash generation, and resilient profitability despite broad consumer and FX headwinds. While the company saw modest revenue growth and margin stability, valuation remains elevated relative to the sector, and near-term price momentum has softened after a multiyear high.
Latest Earnings
Q4 2025 Earnings (Dec 31, 2025)
Earnings Per Share (EPS)
Actual
$0.58
Estimated
$0.56
Surprise
+$0.02
Surprise %
+2.65%
Revenue
Actual
$11.82B
Estimated
$12.05B
Surprise
-$227.71M
Surprise %
-1.89%
Historical Earnings
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Earnings Per Share | ||||||||
| EPS (Actual) | $0.58 | $0.82 | $0.87 | $0.73 | $0.55 | $0.77 | $0.84 | $0.72 |
| EPS (Estimated) | $0.56 | $0.78 | $0.83 | $0.71 | $0.52 | $0.74 | $0.81 | $0.70 |
| EPS Surprise | +$0.02 | +$0.04 | +$0.04 | +$0.02 | +$0.03 | +$0.03 | +$0.03 | +$0.02 |
| % Diff | +2.7% | +5.3% | +4.3% | +2.2% | +6.2% | +4.1% | +4.2% | +2.9% |
| Revenue | ||||||||
| Revenue (Actual) | $11.82B | $12.46B | $12.54B | $11.13B | $11.54B | $11.85B | $12.36B | $11.3B |
| Revenue (Estimated) | $12.05B | $12.41B | $12.57B | $11.16B | $10.68B | $11.61B | $11.78B | $11.01B |
| Revenue Surprise | -$227.71M | +$49.93M | -$32.13M | -$29.33M | +$861.94M | +$243.77M | +$587.28M | +$292.58M |
| % Diff | -1.9% | +0.4% | -0.3% | -0.3% | +8.1% | +2.1% | +5.0% | +2.7% |
Valuation
Coca-Cola (KO) is currently trading near its historical and sector valuation averages, supported by modest revenue growth and solid earnings momentum. The consensus analyst outlook is positive, with a modest price upside reflected in price targets near $84, justified by steady dividend growth, strong brand positioning, and margin durability. However, elevated valuation multiples relative to beverage industry norms suggest a premium that is well supported but warrants close monitoring.
Valuation Metrics
Price to Earnings
TTM
Price to Sales
TTM
Price to Book
TTM
Enterprise Value to EBITDA
TTM
Enterprise Value to Revenue
TTM
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Price to Earnings | 33.11 | 19.11 | 19.86 | 22.73 | 30.56 | 27.17 | 28.44 | 20.75 |
| Price to Sales | 25.44 | 22.69 | 24.14 | 27.20 | 23.24 | 26.11 | 22.18 | 23.34 |
| Price to Book | 9.35 | 9.04 | 10.59 | 11.55 | 10.79 | 11.67 | 10.61 | 9.98 |
| Enterprise Value to EBITDA | 92.58 | 65.52 | 62.04 | 72.90 | 86.22 | 83.92 | 81.93 | 65.50 |
| Enterprise Value to Revenue | 28.42 | 25.47 | 27.32 | 30.86 | 26.24 | 28.84 | 24.62 | 26.18 |
Sentiment & Analyst Ratings
The overall market sentiment for Coca-Cola (KO) is positive, supported by a strong analyst consensus favoring buy or strong buy ratings with price targets around $84. Recent news highlights leadership changes, ongoing restructuring, and sustainability initiatives, which are seen as catalysts for growth. Retail sentiment is generally bullish though social buzz is somewhat moderated compared to historical averages.
Analyst Recommendations
Risk Assessment
The Coca-Cola Company exhibits a moderately strong financial position with improving liquidity and manageable debt levels. While facing macroeconomic and currency headwinds in 2026, its solid brand presence and free cash flow generation support a stable outlook, albeit with some near-term margin pressure risks. Analyst sentiment is predominantly positive, reflecting confidence in stable growth and dividend resilience despite sector challenges.
Liquidity & Solvency
Current Ratio
Latest Quarter: Q4 2025
Quick Ratio
Latest Quarter: Q4 2025
Debt-to-Equity
Latest Quarter: Q4 2025
Debt-to-Assets
Latest Quarter: Q4 2025
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Liquidity Metrics | ||||||||
| Current Ratio | 1.46 | 1.21 | 1.21 | 1.10 | 1.03 | 1.06 | 1.08 | 1.04 |
| Quick Ratio | 1.25 | 1.00 | 0.98 | 0.89 | 0.84 | 0.90 | 0.92 | 0.86 |
| Solvency Metrics | ||||||||
| Debt-to-Equity | 1.41 | 1.52 | 1.73 | 1.87 | 1.83 | 1.74 | 1.69 | 1.61 |
| Debt-to-Assets | 0.43 | 0.45 | 0.47 | 0.48 | 0.45 | 0.44 | 0.43 | 0.43 |
Liquidity Assessment
Current Ratio: 1.46(Adequate)
Quick Ratio: 1.25(Strong)
The company has adequate liquidity but may face challenges in a downturn.
Solvency Assessment
Debt-to-Equity: 1.41(High)
Debt-to-Assets: 0.43(Moderate)
The company has relatively high debt levels, which may increase financial risk in economic downturns.
Frequently Asked Questions about KO
AI Answers: Common Questions About KO
Get AI-powered answers to the questions investors ask most about The Coca-Cola Company
KO is a good buy for short-term traders given bullish technicals and positive sentiment, but for long-term investors, the current P/E of ~26 and price near all-time highs ($79.34, 52W high $82) suggest waiting for a pullback or new growth catalysts. The stock is fairly valued, offering reliable dividends but limited capital appreciation at these levels.
Unless your thesis has changed or you need to rebalance, there is no strong reason to sell KO now: fundamentals remain solid, technicals are bullish, and sentiment is positive. However, if you are seeking high growth or concerned about valuation, trimming on strength near resistance ($82) could be considered.
The biggest risks are currency volatility (Sentinel: FX headwinds in 2026), regulatory changes (e.g., sugar taxes), and margin compression from input cost inflation. KO's debt-to-equity is moderately high at 1.4, but interest coverage is healthy (>4x), and liquidity ratios are solid (current ratio just below 1.5, quick ratio above 1.2).
Analyst price targets cluster around $84 (Pulse), with technical resistance at $82 and potential upside to $85 if a breakout occurs (Candela). Downside support is near $74.25 (50 SMA) and $70.75 (200 SMA). Expect modest capital appreciation in the near term.
KO is trading at a P/E of 26.1, above the industry average but in line with premium peers (Valorem). The stock is fairly valued given its quality, but not undervalued; further upside depends on accelerating growth or new catalysts.
KO is fundamentally strong, with gross margins above 60%, operating margins at 28.7%, and net margins at 27.3% (Essentia). ROE exceeds 30%, and cash flow is robust, supporting steady dividends and buybacks. Growth is modest but reliable.
Technicals are bullish: KO trades above all major moving averages, with a golden cross active and RSI at 58 (neutral, not overbought). Upside targets are $82-$85, with strong support at $74.25 and $70.75 (Candela). Momentum is positive and trend is strong.
Key catalysts include the leadership transition to Henrique Braun, ongoing restructuring and cost initiatives, new product launches (e.g., BodyArmor, Diet Cherry Coke), and continued expansion in emerging markets. Watch for upcoming earnings and macro developments impacting FX and input costs.
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