What Happened:

Shares of coconut water company The Vita Coco Company (NASDAQ:COCO) jumped 5.3% in the morning session after the company reported first quarter results with revenue, gross margin, and EPS exceeding expectations. The topline benefited from improved pricing of Vita Coco Coconut Water and growth in private label case equivalent ("CE") volume. It's also nice to see that full year guidance for revenue and adjusted EBITDA both came in slightly above Wall Street analysts' estimates. Zooming out, this was a great quarter that shareholders will appreciate.

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What is the market telling us:

Vita Coco's shares are not very volatile than the market average and over the last year have had only 19 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 2 months ago, when the stock gained 16.5% on the news that the company reported fourth-quarter results that blew past analysts' EPS expectations. Its revenue also outperformed Wall Street's estimates. On the other hand, its full-year revenue guidance was underwhelming. However, adjusted EBITDA guidance came in ahead, which is sure to blunt the impact of the below-Consensus revenue guidance. Overall, we think this was a strong quarter that should satisfy shareholders.

Vita Coco is down 0.3% since the beginning of the year, and at $26.12 per share it is trading 18% below its 52-week high of $31.83 from September 2023. Investors who bought $1,000 worth of Vita Coco's shares at the IPO in October 2021 would now be looking at an investment worth $1,931.

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