NASDAQ · Consumer Defensive

PepsiCo, Inc.

PEP · Beverages - Non-Alcoholic

$142.02

▲ 0.43 (0.3%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

A⤢

Gross Profit Margin 55.2%

Operating Margin 16.5%

Net Income Margin 12.0%

Fin. Health

F⤢

Years to Pay Off Debt 22.7 yrs

Working Capital vs Long-Term Debt -$46.1B

Working Capital -$3.6B

Valuation

F⤢

Margin of Safety 0.0%

Price-to-Book 9.08x

Cash Flow

C⤢

Free Cash Flow -$406M

CapEx % of Net Income 19.2%

Owner Earnings $3.7B

Profitability

Gross Profit Margin 55.2%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 16.5%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 12.0%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 22.7 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$46.1B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital -$3.6B

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow -$406M

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 19.2%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $3.7B

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About PepsiCo, Inc.

PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. The company operates through six segments: PepsiCo Foods North America; PepsiCo Beverages North America; International Beverages Franchise; Europe, Middle East and Africa; Latin America Foods; and Asia Pacific Foods. It offers cereals, chips, dips, granola bars, oatmeal, pasta, rice, and syrups and mixes; refrigerated dips and spreads; beverage concentrates, fountain syrups, and finished goods; and ready-to-drink tea and coffee products. The company also provides SodaStream sparkling water makers and related products, as well as various dairy products under the Agusha, Chudo, and Domik v Derevne brands. It serves wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, and others through a network of direct-store-delivery, customer warehouse, and distributor networks, as well as directly to consumers through e-commerce platforms and retailers. PepsiCo, Inc. was founded in 1898 and is based in Purchase, New York.

Market Data

Market Cap $194.1B

Enterprise Value $241.8B

P/E (TTM) 22.30

Dividend Yield 4.02%

Exchange NASDAQ

Key Margins

Gross Profit 55.2%

Operating Margin 16.5%

Net Margin 12.0%

Company Info

Sector Consumer Defensive

Industry Beverages - Non-Alcoholic

Employees 306000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering PepsiCo, Inc. at $142.02.

The business passes only 2 of 7 of Graham's defensive criteria — well below his required standard.

At $142.02, the stock trades at a 481% premium to its Graham Number of $24.46. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q1 2026	Q4 2025	Q3 2024
Gross Profit %	55.2%▲	53.2%•	N/A
Operating Margin %	16.5%▲	12.1%•	N/A
Net Income %	12.0%▲	8.7%•	N/A
Diluted EPS	1.70▼	1.85•	N/A

Balance Sheet Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Total Assets	$110.6B	$107.4B	N/A
Total Debt	$52.7B▲	$49.9B•	N/A
Working Capital	-$3.6B▲	-$4.8B•	N/A
Years to Pay Debt	22.66	19.65	N/A

Cash Flow Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Free Cash Flow	-$406M▼	$4.7B•	N/A
Owner Earnings	$3.7B	$5.8B	N/A
CapEx % of Net Income	19.2%	75.4%	N/A

Income Statement

	2026	2025
Tax Effect Of Unusual Items	0	0
Tax Rate For Calcs	0	0
Normalized EBITDA	4,175,000	4,707,000
Total Unusual Items		0
Total Unusual Items Excluding Goodwill		0
Net Income From Continuing Operation Net Minority Interest	2,327,000	2,540,000
Reconciled Depreciation	904,000	1,374,000
Reconciled Cost Of Revenue	8,712,000	13,723,000
EBITDA	4,175,000	4,707,000
EBIT	3,271,000	3,333,000
Net Interest Income	-301,000	-333,000
Interest Expense	301,000	333,000
Normalized Income	2,327,000	2,540,000
Net Income From Continuing And Discontinued Operation	2,327,000	2,540,000
Total Expenses	16,230,000	25,786,000
Total Operating Income As Reported	3,213,000	3,557,000
Diluted Average Shares	1,371,000	1,371,000
Basic Average Shares	1,367,000	1,367,340
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	2,327,000	2,540,000
Net Income Common Stockholders	2,327,000	2,540,000
Net Income	2,327,000	2,540,000
Minority Interests	-11,000	-15,000
Net Income Including Noncontrolling Interests	2,338,000	2,555,000
Net Income Continuous Operations	2,338,000	2,555,000
Tax Provision	632,000	445,000
Pretax Income	2,970,000	3,000,000
Other Income Expense	58,000	-224,000
Other Non Operating Income Expenses	58,000	-224,000
Special Income Charges		0
Impairment Of Capital Assets		0
Net Non Operating Interest Income Expense	-301,000	-333,000
Interest Expense Non Operating	301,000	333,000
Operating Income	3,213,000	3,557,000
Operating Expense	7,518,000	12,063,000
Selling General And Administration	7,518,000	12,063,000
Gross Profit	10,731,000	15,620,000
Cost Of Revenue	8,712,000	13,723,000
Total Revenue	19,443,000	29,343,000
Operating Revenue	19,443,000	29,343,000

Balance Sheet

	2026	2025	2024
Treasury Shares Number	499,000	500,000
Ordinary Shares Number	1,366,768	1,367,340
Share Issued	1,865,768	1,867,340
Net Debt	42,253,000	40,023,000
Total Debt	52,728,000	49,901,000
Tangible Book Value	-12,781,000	-13,576,000
Invested Capital	74,111,000	69,588,000
Working Capital	-3,561,000	-4,815,000
Net Tangible Assets	-12,781,000	-13,576,000
Capital Lease Obligations		719,000	642,000
Common Stock Equity	21,383,000	20,406,000
Total Capitalization	63,960,000	62,727,000
Total Equity Gross Minority Interest	21,536,000	20,547,000
Minority Interest	153,000	141,000
Stockholders Equity	21,383,000	20,406,000
Gains Losses Not Affecting Retained Earnings	-14,342,000	-15,024,000
Other Equity Adjustments	-14,342,000	-15,024,000
Treasury Stock	41,864,000	41,832,000
Retained Earnings	73,165,000	72,788,000
Additional Paid In Capital	4,401,000	4,451,000
Capital Stock	23,000	23,000
Common Stock	23,000	23,000
Total Liabilities Net Minority Interest	89,110,000	86,852,000
Total Non Current Liabilities Net Minority Interest	54,633,000	54,088,000
Other Non Current Liabilities	8,008,000	7,965,000
Non Current Deferred Liabilities	4,048,000	3,802,000
Non Current Deferred Taxes Liabilities	4,048,000	3,802,000
Long Term Debt And Capital Lease Obligation	42,577,000	42,321,000
Long Term Debt	42,577,000	42,321,000
Current Liabilities	34,477,000	32,764,000
Other Current Liabilities		5,771,000	5,216,000
Current Debt And Capital Lease Obligation	10,151,000	7,580,000
Current Capital Lease Obligation		719,000	642,000
Current Debt	10,151,000	6,861,000
Other Current Borrowings		4,220,000	4,264,000
Commercial Paper		2,641,000	2,818,000
Pensionand Other Post Retirement Benefit Plans Current		2,230,000	2,256,000
Payables And Accrued Expenses	24,326,000	17,183,000
Current Accrued Expenses		3,512,000	3,458,000
Payables	24,326,000	13,671,000
Dividends Payable		1,967,000	1,885,000
Accounts Payable	24,326,000	11,704,000
Total Assets	110,646,000	107,399,000
Total Non Current Assets	79,730,000	79,450,000
Other Non Current Assets	9,064,000	923,000
Defined Pension Benefit		1,449,000	1,190,000
Non Current Deferred Assets	4,560,000	4,746,000
Non Current Deferred Taxes Assets	4,560,000	4,541,000
Non Current Note Receivables		136,000	111,000
Investments And Advances	2,135,000	4,564,000
Other Investments		2,526,000	1,346,000
Long Term Equity Investment	2,135,000	2,038,000
Goodwill And Other Intangible Assets	34,164,000	33,982,000
Other Intangible Assets	15,143,000	15,066,000
Goodwill	19,021,000	18,916,000
Net PPE	29,807,000	33,650,000
Accumulated Depreciation	-31,670,000	-31,004,000
Gross PPE	61,477,000	64,654,000
Construction In Progress		4,811,000	5,941,000
Other Properties		3,745,000	3,383,000
Machinery Furniture Equipment		41,113,000	36,990,000
Buildings And Improvements		13,875,000	11,938,000
Land And Improvements		1,110,000	1,136,000
Current Assets	30,916,000	27,949,000
Other Current Assets	1,706,000	1,068,000
Inventory	6,211,000	5,845,000
Finished Goods	3,364,000	3,121,000
Work In Process	133,000	143,000
Raw Materials	2,714,000	2,581,000
Receivables	12,171,000	11,506,000
Receivables Adjustments Allowances	-225,000	-230,000
Other Receivables		2,471,000	2,202,000
Accounts Receivable	12,396,000	9,265,000
Cash Cash Equivalents And Short Term Investments	10,828,000	9,530,000
Other Short Term Investments	353,000	371,000
Cash And Cash Equivalents	10,475,000	9,159,000

Cash Flow

	2026	2025	2024
Free Cash Flow	-406,000	4,703,000
Repurchase Of Capital Stock	-182,000	-248,000
Repayment Of Debt	-2,305,000	-3,340,000
Issuance Of Debt	6,099,000	1,598,000
Capital Expenditure	-447,000	-1,916,000
End Cash Position	10,551,000	9,204,000
Beginning Cash Position	9,204,000	8,171,000
Effect Of Exchange Rate Changes	121,000	27,000
Changes In Cash	1,226,000	1,006,000
Financing Cash Flow	1,662,000	-3,971,000
Cash Flow From Continuing Financing Activities	1,662,000	-3,971,000
Net Other Financing Charges	-77,000	-56,000
Proceeds From Stock Option Exercised	93,000	21,000
Cash Dividends Paid	-1,966,000	-1,946,000
Common Stock Dividend Paid	-1,966,000	-1,946,000
Net Common Stock Issuance	-182,000	-248,000
Common Stock Payments	-182,000	-248,000
Net Issuance Payments Of Debt	3,794,000	-1,742,000
Net Short Term Debt Issuance	2,459,000	-915,000
Short Term Debt Payments	-676,000	-2,503,000
Short Term Debt Issuance	3,135,000	1,588,000
Net Long Term Debt Issuance	1,335,000	-827,000
Long Term Debt Payments	-1,629,000	-837,000
Long Term Debt Issuance	2,964,000	10,000
Investing Cash Flow	-477,000	-1,642,000
Cash Flow From Continuing Investing Activities	-477,000	-1,642,000
Net Other Investing Changes	19,000	17,000
Net Investment Purchase And Sale	5,000	182,000
Sale Of Investment	14,000	182,000
Purchase Of Investment	-9,000	0	0
Net Business Purchase And Sale	-67,000	-181,000
Sale Of Business		34,000	21,000
Purchase Of Business	-67,000	-215,000
Net PPE Purchase And Sale	13,000	256,000
Sale Of PPE	13,000	256,000
Capital Expenditure Reported	-447,000	-1,916,000
Operating Cash Flow	41,000	6,619,000
Cash Flow From Continuing Operating Activities	41,000	6,619,000
Change In Working Capital	-2,967,000	2,415,000
Change In Payables And Accrued Expense	-1,716,000	531,000
Change In Payable	-1,716,000	531,000
Change In Account Payable	-1,847,000	970,000
Change In Tax Payable	131,000	-439,000
Change In Income Tax Payable	131,000	-439,000
Change In Prepaid Assets	-406,000	418,000
Change In Inventory	-315,000	299,000
Change In Receivables	-530,000	1,167,000
Other Non Cash Items	-625,000	-64,000
Stock Based Compensation	93,000	81,000
Asset Impairment Charge	59,000	-123,000
Deferred Tax	226,000	41,000
Deferred Income Tax	226,000	41,000
Depreciation Amortization Depletion	904,000	1,374,000
Depreciation And Amortization	904,000	1,374,000
Depreciation	904,000	1,374,000
Operating Gains Losses	13,000	340,000
Pension And Employee Benefit Expense	13,000	340,000
Net Income From Continuing Operations	2,338,000	2,555,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $17.9B ▲ $19.4B +8.5%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 55.8% ▲ 55.2% -0.6pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 17.9% ▲ 16.5% -1.4pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 10.2% ▲ 12.0% +1.7pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$19.4B/qtr (≈$77.8B ann.)

vs > $1.5B annualised revenue

❌ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

0.90x current ratio

vs ≥ 2.0x

❌ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

-$406M

vs Positive

Operating Cash Flow

$41M

Latest quarter · Buffett's cash reality check

ROIC

3.3%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

9.0x

Net Assets: $21.5B

Peers & Industry

No auto-detected peers for Beverages - Non-Alcoholic. You can manually compare PEP against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.18%

Low — management has little skin in the game

Return on Equity (ROE)

10.9%

Adequate — returns are moderate

Return on Assets (ROA)

2.1%

Fair — average asset utilization

Share Buybacks (Latest Year)

$1.0B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

+5.7% YoY

Debt is roughly stable

Leadership Team

Ramon Luis Laguarta

Chairman & CEO

Age 61

Pay: $8,227,970

0.354% of net income

Stephen Schmitt

Executive Vice President & CFO

Age 51

Pay: $3,196,609

0.137% of net income

Silviu Yeugeniu Popovici

Chief Executive Officer of Europe, Middle East & Africa

Age 57

Pay: $3,613,570

0.155% of net income

Steven Williams

Executive VP & Vice Chairman of Global Chief Commercial Officer & Corporate Affairs

Age 59

Pay: $2,634,533

0.113% of net income

Gregg Roden

Executive VP & COO

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	8.25%	115,841,477
Vanguard Capital Management LLC	6.32%	88,807,774
State Street Corporation	4.23%	59,419,350
Vanguard Portfolio Management LLC	2.60%	36,455,039
JPMORGAN CHASE & CO	2.48%	34,798,932
Geode Capital Management, LLC	2.46%	34,611,819
Charles Schwab Investment Management, Inc.	2.15%	30,210,808
Morgan Stanley	1.89%	26,581,174

⚠️ Current ratio below 1 — liquidity risk

Risk Analysis

Beta (Market Risk)

0.36

Low volatility — more stable than the market

Short Interest

2.0% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

2.45x

High leverage — significant financial risk

Current Ratio

0.90x

Weak liquidity — current liabilities exceed current assets

52-Week Price Range

Low: $127.60 Current: $142.02 High: $171.48

Currently at 33% of 52-week range

PepsiCo, Inc.

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis