US · Nasdaq · PEP
PepsiCo (PEP) stock analysis: valuation and financials
Consumer Staples · Beverages (Production/Distribution)
$125.89 +0.2% Price as of Oct 5, 2026
Narrow-moat scale and 4.7% yield, but flat volumes, 12.2% operating margin, 2.79x net leverage and a base case 22% below market cap make risk/reward unattractive.
- Market cap
- $171.5B
- P/E
- 16.4x
- EV/Sales
- 2.3x
- FCF yield
- 5.4%
- Dividend yield
- 4.7%
- 52-week range
- $125.60 – $170.49
- Next earnings
- Oct 8, 2026
Research as of Oct 6, 2026
Business quality scorecard
- Growth11
- Profitability52
- Cash flow79
- Balance sheet41
- Capital allocation57
- Innovation9
- Valuation68
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
Retailers, distributors and independent bottlers in more than 200 countries pay for convenient foods and beverages; PepsiCo Foods North America is the profit engine at 45.7% of segment profit on a 22.4% operating margin, while EMEA is the fastest-growing segment (+8.2% YoY).
Financials by year
| FY2021Jan–Dec 2021 | FY2022Jan–Dec 2022 | FY2023Jan–Dec 2023 | FY2024Jan–Dec 2024 | FY2025Jan–Dec 2025 | |
|---|---|---|---|---|---|
| Revenue | $79.5B | $86.4B | $91.5B | $91.9B | $93.9B |
| Revenue growth | +12.9% | +8.7% | +5.9% | +0.4% | +2.3% |
| Gross margin | 53.3% | 53.0% | 54.2% | 54.6% | 54.1% |
| Operating margin | 14.0% | 13.3% | 13.1% | 14.0% | 12.2% |
| Net income | $7.6B | $8.9B | $9.1B | $9.6B | $8.2B |
| Free cash flow | $7.0B | $5.6B | $7.9B | $7.2B | $7.7B |
| FCF margin | 8.8% | 6.5% | 8.7% | 7.8% | 8.2% |
Amounts in USD · What is free cash flow?
Margins FY2025 gross margin 54.2% vs 54.6% FY2024 (-41bps) and operating margin 12.2% vs 14.0% (-179bps) on commodity inflation, Rockstar impairment and lower organic volume. TTM gross 54.0%/operating 14.8%; Q2 FY2026 operating margin 16.6% vs 14.9%.
- Cash flow HealthyTTM operating cash flow $13.46B versus net income $10.45B, cash conversion 1.41x; FY2025 OCF $12.09B versus $8.24B net income, with OCF above net income in every year since FY2020.
- Debt ManageableNet debt $50.2B, 2.79x EBITDA of $17.96B — moderate leverage. Total debt rose to $60.9B TTM from $49.2B at FY2025 year-end, with cash of $10.25B and short-term investments $0.47B.
Balance sheet Leverage · Moderate
- Cash & short-term investments
- $10.7B
- Total debt
- $60.9B
- Net debt
- $50.2B
- Net debt / EBITDA
- 2.8x
- Interest coverage
- 12.7x
- Current ratio
- 0.9x
As of Jun 13, 2026 · Amounts in USD · How to read a balance sheet
Management and track record
- Management AdequateCapital returns skew to dividends: $33.5B dividends versus $4.6B buybacks and $1.67B stock comp over five years; diluted shares CAGR -0.3%, so repurchases barely offset dilution.
- Credibility MediumFY2025 core constant currency EPS guidance was reset in April 2025 from mid-single-digit growth to about even; FY2025 core EPS delivered $8.14 versus $8.16 in 2024, i.e. met only after the cut.
Of 3 guided figures checked: 3 beat, 0 in range, 0 missed.
Valuation range
Implied value per share · Price when researched: $125.89
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
The full report is for members.